TaxTMI Updates e-Newsletter
Jan 08,2020

Entitled to deduction u/s 80HHC on the total income after excluding the deduction available under Section 80IB - Appellant entitled to deduction under Section 80HHC on the gross total income without reducing it by the deduction allowed under Section 80IB - Appeal disposed in favour of the assessee on the admitted substantial questions by applying the Court's earlier decision in Associated Capsules (P.) Ltd. [2011 (1) TMI 787 - BOMBAY HIGH COURT] by HC [2011 (1) TMI 1556 - BOMBAY HIGH COURT]

HELD THAT:- SLP dismissed.

Application of net profit rate for assessment - allowance of depreciation notwithstanding adoption of net profit rate - re-determination of net profit rate on remand - remand for recomputation of tax

Application of net profit rate for assessment - allowance of depreciation notwithstanding adoption of net profit rate - Whether the net profit rate fixed by the Tribunal should remain at 8% and whether depreciation, interest and partners' remuneration are allowable despite adoption of a net profit rate. - HELD THAT: - The Court recorded that an earlier judgment of this Court had accepted a net profit rate of 8% and, following the Division Bench decision in M/s. Shri Ram Jhanwar Lal and the precedent in CIT v. Jain Construction Co., directed that where a net profit rate is applied, adjustments such as depreciation are nonetheless permissible. The Income Tax Appellate Tribunal, on remand, increased the net profit rate to 12.5% and then allowed depreciation and other deductions; the High Court found this approach inconsistent with the earlier direction to retain the net profit rate at 8% while permitting depreciation, interest and partners' remuneration. For these reasons the Court held that the Tribunal erred in re-fixing the profit rate at 12.5% instead of applying the previously determined 8% and allowing the additional deductions as directed by the earlier judgments. [Paras 6, 7, 9]

Tribunal's computation is modified to fix the net profit rate at 8% on gross contract receipts, and depreciation, interest and partners' remuneration are to be allowed.

Re-determination of net profit rate on remand - remand for recomputation of tax - Whether the matter should be remitted for recomputation of tax after applying the corrected net profit rate and allowing the deductions. - HELD THAT: - Having modified the Tribunal's determination of the net profit rate and directed that depreciation, interest and remuneration be allowed, the Court remitted the matter to the Income Tax Authorities for recomputation of taxable income and tax in accordance with these directions. The remand is limited to quantification and computation in conformity with the Court's direction to apply 8% and permit the specified deductions; the substantive legal questions have been decided in favour of the assessee. [Paras 8]

Matter remitted to the Income Tax Authorities for recomputation of tax in accordance with the Court's directions.

Final Conclusion: Appeal allowed to the extent the Tribunal's order is modified: net profit rate fixed at 8% on gross contract receipts and depreciation, interest and partners' remuneration permitted; matter remitted to the Income Tax Authorities for recomputation of the tax for Assessment Year 2001-02.

Approval under Section 10(23C)(vi) - existence solely for educational purposes - extra-mural, extension and field outreach programmes - prima facie satisfaction for grant of approvals versus assessment-stage scrutiny - time limit for application under the 14th proviso to Section 10(23C)

Extra-mural, extension and field outreach programmes - existence solely for educational purposes - prima facie satisfaction for grant of approvals versus assessment-stage scrutiny - Validity of rejection of approval under Section 10(23C)(vi) on the ground that an MOA clause referring to extra-mural/extension/field outreach activities renders the petitioner not solely an educational entity. - HELD THAT: - The Court held that the presence in the Memorandum of Association of an object referring to extra-mural studies, extension programmes and field outreach activities does not, by itself, disqualify an institution from approval under Section 10(23C)(vi). The legal test for grant of approval requires the taxing authority to be satisfied prima facie as to the existence of the institution and its avowed objects; detailed scrutiny as to whether activities actually pursued conform strictly to statutory requirements is a matter for assessment and monitoring by the Assessing Officer. The Commissioner's rejection as premature for treating the MOA clause as establishing a purpose other than education was therefore erroneous and was set aside in the petitions where this ground prevailed. [Paras 6, 11, 12, 13]

Rejection of approval solely on the basis of the MOA clause referring to extra-mural/extension activities was premature; writs allowed on this ground.

Time limit for application under the 14th proviso to Section 10(23C) - approval under Section 10(23C)(vi) - Whether an application filed on 30.09.2011 was time-barred for seeking approval relevant to Assessment Year 2012-13. - HELD THAT: - The Court interpreted the amendment effected by Finance (No.2) Act, 2009 which introduced the 14th proviso to permit applications up to 30th September of the relevant assessment year. The object of the amendment was to expand, not constrict, filing time; therefore an application filed on 30.09.2011 was within the extended time frame for the relevant period and could not be treated as non-maintainable on the ground invoked by the Revenue. The petitions challenging the rejection on timeliness grounds were allowed. [Paras 14, 15, 16]

Application filed on 30.09.2011 was not time-barred for the relevant assessment year; rejection on that ground set aside and writs allowed.

Approval under Section 10(23C)(vi) - existence solely for educational purposes - Whether clauses in the MOA permitting acquisition of immovable property and investment of funds in equity disqualified the petitioner from being solely for educational purposes. - HELD THAT: - The Court found that clauses empowering acquisition of assets and investment of funds were intended to enable the institution to acquire and manage assets necessary for its objects, and did not demonstrate that the Society was engaged in commercial ventures outside education. Such matters of application, accumulation or deployment of income and compliance are to be monitored at the assessment stage; the Commissioner erred in treating the mere inclusion of acquisition and investment clauses in the MOA as disqualifying the petitioner from approval. The impugned order was set aside and direction issued to grant approval. [Paras 17, 18, 19]

Clauses permitting acquisition of property and investment of funds in the MOA do not, by themselves, disqualify the petitioner; rejection set aside and approval directed to be issued.

Final Conclusion: The High Court allowed the writ petitions challenging rejection of applications for approval under Section 10(23C)(vi), holding that (i) an MOA clause relating to extra-mural/extension activities does not ipso facto defeat the educational character for prima facie approval, (ii) the application filed on 30.09.2011 was not time-barred in view of the 14th proviso amendment, and (iii) MOA provisions permitting acquisition of property and investment do not, by themselves, disqualify the society; the Revenue's orders were set aside and approvals were directed to be issued.

Limitation for reassessment - extended period of limitation under proviso to Section 147 - failure to disclose fully and truly all material facts - reopening based on materials already on record - reassessment as impermissible change of opinion - claim of deduction under Section 80IA - disclosure and supporting material

Limitation for reassessment - extended period of limitation under proviso to Section 147 - failure to disclose fully and truly all material facts - claim of deduction under Section 80IA - disclosure and supporting material - Reassessment proceedings insofar as they relate to the claim of deduction under Section 80IA for Assessment Year 2004-05 are barred by limitation. - HELD THAT: - The Court found that the petitioner had filed the return and furnished Form 10CCC (and other supporting materials), replied to questionnaire and produced particulars which were available on file at the time of assessment and appellate proceedings. The Commissioner had earlier considered the correctness of the claim under Section 80IA in proceedings under Section 263 and dropped two of the proposed grounds; the reassessment was initiated on the basis of materials already on the record. Because the assessee had not failed to file a return, the Department could invoke the extended two year period only if there was a failure to disclose fully and truly all material facts. The primary and material particulars relevant to the Section 80IA claim were admittedly on record; consequently the extended period could not be invoked. The Court relied on the principle that reopening cannot be sustained where it amounts to a change of opinion and where all primary particulars were available to the Assessing Officer when the original assessment was completed, and therefore quashed reassessment so far as it related to the Section 80IA deduction. [Paras 11, 12, 13, 15, 16]

Reassessment insofar as it challenges the Section 80IA deduction for AY 2004-05 is barred by limitation and is quashed.

Reassessment based on additional grounds not challenged - depreciation on imported car - Reassessment insofar as it concerns the grant of depreciation on the imported car is sustained. - HELD THAT: - The Court observed that the issue of depreciation claimed on an imported car was neither challenged in the writ petition nor otherwise disallowed by the Court; accordingly the reassessment insofar as it related to that issue stands confirmed. [Paras 17]

Reassessment is confirmed on the issue of depreciation on the imported car; the writ petition is allowed only to the extent indicated (quash of reassessment on Section 80IA issue).

Final Conclusion: Writ petition allowed in part: reassessment for Assessment Year 2004-05 quashed insofar as it attacks the deduction under Section 80IA (held barred by limitation); reassessment confirmed insofar as it relates to depreciation on the imported car. Connected miscellaneous petition closed; no costs.

Reopening of assessment under section 147/148 - cash deposits presumed to be income from undisclosed sources - proof of sale of agricultural land as explanation for cash deposits - oral agreement and evidence of possession as proof of transaction - treatment of agricultural receipts as agricultural income

Reopening of assessment under section 147/148 - Validity of reopening the assessment to examine cash bank deposits. - HELD THAT: - The Tribunal examined whether the reasons recorded justified reopening. Although mere bank deposits and non filing of return alone do not ipso facto show escaped income, the Assessing Officer had recorded sufficient reasons to form a belief that income to the extent of cash deposits had escaped assessment. The appellate authority's confirmation of reopening was upheld as there was no infirmity in the reasons recorded and conclusion reached by the AO. [Paras 3, 4]

Reopening of assessment under section 147/148 is upheld.

Cash deposits presumed to be income from undisclosed sources - proof of sale of agricultural land as explanation for cash deposits - oral agreement and evidence of possession as proof of transaction - Whether cash deposits of Rs. 18,00,000/- represented income from undisclosed sources or were genuine sale proceeds of agricultural land. - HELD THAT: - On reassessment the assessee produced contemporaneous explanation, witnesses (buyers) who appeared and confirmed payment, affidavits, jamabandi and documents evidencing ownership and transfer of possession. The Tribunal accepted that possession was handed over, parties corroborated the transaction and explained their capacity to pay, and registry formalities were pending due to family ownership complexities. The method of payment in cash and the oral nature of agreement did not invalidate the transaction; oral contracts are recognised and can be enforced and the transaction was supported by documentary and witness evidence. Considering subsequent years' returns showing absence of agricultural income and continued cultivation by purchasers, the assessee discharged the primary onus and the addition was without merit. [Paras 9, 10, 11, 12, 13]

Addition of Rs. 18,00,000/- as income from undisclosed sources is deleted; cash deposits accepted as bona fide sale proceeds of agricultural land.

Treatment of agricultural receipts as agricultural income - Whether cash receipt of Rs. 1,30,800/- from cultivation by another person was agricultural income or non agricultural income. - HELD THAT: - The assessee proved ownership of the agricultural land and produced the cultivator who admitted cultivating the land and paying annual crop dues and amounts for falling trees. The quantum of the receipts was consistent with the landholding and the arrangement; therefore the receipt constituted agricultural income. The Assessing Officer's classification of the amount as non agricultural was not sustained. [Paras 14, 15, 16]

The amount of Rs. 1,30,800/- is to be treated as agricultural income and the addition deleted.

Final Conclusion: Appeal allowed: reopening sustained but additions deleted - the cash deposits of Rs.18,00,000/- accepted as sale proceeds of agricultural land and Rs.1,30,800/- held to be agricultural income; matter disposed in favour of the assessee for AY 2009-10.

Reopening of assessment under section 147/148 - reasons to believe / reasons recorded - application of mind - borrowed satisfaction - accommodation entries / bogus share application money - quashing of reassessment for want of jurisdiction

Reopening of assessment under section 147/148 - reasons to believe / reasons recorded - application of mind - borrowed satisfaction - accommodation entries / bogus share application money - quashing of reassessment for want of jurisdiction - Validity of reopening assessment for AY 2008-09 under section 147/148 and whether the reasons recorded demonstrate independent application of mind by the Assessing Officer - HELD THAT: - The Tribunal found that the notice under section 148 was issued solely on information received from the Investigation Wing that the assessee had received alleged accommodation entries of Rs. 8 lakhs as share application money, and that the reasons recorded by the AO reproduced conclusions from the investigation report without any independent inquiry or link between tangible material and the formation of a belief that income had escaped assessment. The AO's reasons were held to be vague, non specific and reflective of a "borrowed satisfaction"; there was no specification of the alleged escaped income amount in the reasons and no demonstration that the cash originated from the assessee's coffers. Relying on settled precedents emphasising that the AO must apply his own mind to tangible material before forming a reason to believe, the Tribunal concluded that the proceedings were initiated mechanically and without jurisdiction. Following those authorities and the application of the legal principle that mere information from investigation authorities, without independent application of mind and tangible linkages, does not sustain reopening, the Tribunal quashed the reassessment initiated under section 147/148. [Paras 6]

Proceedings under section 147/148 were quashed for want of jurisdiction due to lack of independent application of mind; ground no. 1 allowed and assessment set aside.

Final Conclusion: The Tribunal allowed the appeal partly by quashing the reassessment for AY 2008-09 initiated under section 147/148 on the ground that the Assessing Officer recorded a borrowed satisfaction without independent application of mind; other grounds not pressed were dismissed.

Capital gains computation to be restricted to actual receipts and balance taxable on receipt - Part performance under Section 53A and its incorporation in section 2(47)(v) - requirement of possession/registration - Penalty under section 271(1)(c) not leviable where assessed quantum is deleted or accurate particulars furnished

Capital gains computation to be restricted to actual receipts and balance taxable on receipt - Part performance under Section 53A and its incorporation in section 2(47)(v) - requirement of possession/registration - Capital gains arising from the tripartite/ JDA transaction for A.Y.2007-08 were to be computed only to the extent of consideration actually received in the year and the remaining consideration would be taxable in the year of its receipt. - HELD THAT: - Following the coordinate Bench decision in Shri Prem Singh Lalpura (deceased) (order dated 11.09.2017) which in turn relied on the Punjab & Haryana High Court ruling, the Tribunal held that where the JDA/transfer did not constitute part performance within the meaning of Section 53A of the Transfer of Property Act (and thereby section 2(47)(v) of the Income-tax Act) because essential ingredients including requisite possession/registration were wanting, capital gains cannot be brought to tax on an accrual basis for amounts not actually received. The Tribunal observed that the High Court restricted capital gains to the proportionate sale consideration actually received during the year and directed that the Assessing Officer compute capital gains tax on the basis of actual receipts; the balance, if received later, shall be taxable in the year of receipt. The present appeal was held squarely covered by that precedent; no contrary material was produced by Revenue and there was no change in facts or law warranting different treatment. The Assessing Officer was directed to compute capital gains accordingly.

Appeal partly allowed by restricting taxable capital gains for A.Y.2007-08 to actual consideration received during the year and directing recomputation by the Assessing Officer.

Penalty under section 271(1)(c) not leviable where assessed quantum is deleted or accurate particulars furnished - The deletion of penalty under section 271(1)(c) by the Commissioner (Appeals) was upheld and Revenue's appeal against deletion of penalty dismissed. - HELD THAT: - The Tribunal agreed with the Commissioner (Appeals) that once the disputed quantum of income (on which penalty was based) stood deleted or where the assessee had furnished accurate particulars and had not concealed income, penalty under section 271(1)(c) did not survive. Having considered the material placed before the Commissioner (Appeals) and absent any infirmity, the Tribunal declined to interfere with the deletion of penalty.

Revenue's appeal dismissed and the order deleting penalty under section 271(1)(c) upheld.

Final Conclusion: For A.Y.2007-08 the Tribunal, following coordinate and High Court precedent, directed that capital gains be computed only on the basis of actual receipts with the balance taxable when received, thereby partly allowing the assessee's appeal; the deletion of penalty under section 271(1)(c) was upheld and Revenue's appeal dismissed.

Beneficial ownership under Article 11(3)(c) of the India-Mauritius Double Taxation Avoidance Agreement - Tax Residency Certificate as sufficient evidence of residence and beneficial ownership (CBDT Circular No.789/2000) - bona fide banking business - application of India-Mauritius DTAA to interest income on foreign currency loans and debt securities - levy of interest under section 234B consequential on taxable income - prematurity of penalty proceedings under section 271(1)(c)

Beneficial ownership under Article 11(3)(c) of the India-Mauritius Double Taxation Avoidance Agreement - Tax Residency Certificate as sufficient evidence of residence and beneficial ownership (CBDT Circular No.789/2000) - application of India-Mauritius DTAA to interest income on foreign currency loans and debt securities - bona fide banking business - Interest income earned by the assessee on foreign currency loans to Indian corporates and on debt securities is not taxable in India as the assessee is the beneficial owner within the meaning of Article 11(3)(c) of the India-Mauritius Tax Treaty. - HELD THAT: - The Tribunal examined whether the interest was "derived" and "beneficially owned" by the Mauritius-resident assessee and whether it carried on a bona fide banking business. Reliance was placed on the Tax Residency Certificate issued by the Mauritian authorities and CBDT Circular No.789/2000 which treats such certificate as sufficient evidence of residence and beneficial ownership for application of the India-Mauritius DTAA. Prior Tribunal decisions in the assessee's own cases and the Chennai Bench decision in Hyundai Motor India Ltd. were followed. Although the question of beneficial ownership had been remanded in earlier proceedings, the Tribunal concluded on the facts before it that the Tax Residency Certificate and the consistent tribunal precedents support the finding that the assessee beneficially owned the interest income and thus the income is exempt in India under Article 11(3)(c). [Paras 8]

Addition of interest income was deleted and the interest income held not taxable in India under Article 11(3)(c).

Levy of interest under section 234B consequential on taxable income - Interest under section 234B could not be sustained once the interest income was held not taxable in India. - HELD THAT: - As the additions on account of interest income were deleted, there was no taxable income on which the mandatory/consequential interest under section 234B could be levied. The Tribunal noted its earlier decision in the assessee's own case for AY 2013-14 that the payer was obliged to deduct tax at source and therefore the assessee could not be fastened with section 234B liability. [Paras 13]

Levy of interest under section 234B does not survive and was effectively set aside.

Prematurity of penalty proceedings under section 271(1)(c) - Challenge to initiation of penalty proceedings under section 271(1)(c) was dismissed as not requiring adjudication at this stage. - HELD THAT: - The Tribunal observed that the contention regarding initiation of penalty proceedings was premature for adjudication in the present appeal and therefore did not adjudicate the correctness of initiating penalty proceedings. [Paras 14]

Ground challenging initiation of penalty proceedings dismissed as not pressed / premature.

Application of prior tribunal decisions to assess identical issues - Revenue's cross-appeal against deletion of the additions and related grounds was dismissed as redundant or infructuous. - HELD THAT: - In view of the Tribunal's findings in the assessee's appeal deleting the additions and rejecting the levy of section 234B interest, the grounds raised in the Revenue's appeal on the same issues became redundant or infructuous and were accordingly dismissed. [Paras 17, 19, 21]

Revenue's appeal dismissed.

Final Conclusion: Following prior tribunal precedents and on the basis of the Tax Residency Certificate buttressed by CBDT Circular No.789/2000, the Tribunal held that the assessee beneficially owned the interest income and it is exempt under Article 11(3)(c) of the India-Mauritius DTAA; consequential interest under section 234B could not be sustained and the challenge to initiation of penalty proceedings was dismissed as premature; the Revenue's appeal was dismissed.

Reduction of written down value under Section 43(6) of the Income-tax Act - application of Section 51 to advance forfeiture - substance over form - colourable device doctrine - taxability of forfeited advance as revenue receipt (T.V. Sundaram principle) - deletion of disallowance under Rule 8D(ii) of the Income-tax Rules - disallowance under Rule 8D(iii) of the Income-tax Rules and administrative expenses apportioned to exempt income - allowability of deduction under Section 80IB of the Income-tax Act - allowability of expenditure under Section 37(1) of the Income-tax Act

Reduction of written down value under Section 43(6) of the Income-tax Act - application of Section 51 to advance forfeiture - substance over form - colourable device doctrine - taxability of forfeited advance as revenue receipt (T.V. Sundaram principle) - Validity of reducing the written down value of block of plant and machinery by the amount of advance forfeited/retained by the assessee in relation to a failed asset-sale arrangement - HELD THAT: - Tribunal upheld the view that, looking to substance over form and the assessee's conduct (retention of advances, subsequent sales of major assets to the same purchaser, operation of the plant for toll fees and accounting treatment), the amounts retained could not be treated as mere capital forfeiture immune from adjustment. While the CIT(A) rightly observed that Section 51 in strict terms may not apply, the Tribunal accepted the outcome reached by the revenue authorities on the alternative plank that Section 43(6) permits reduction of the written down value of the block; quoting the principle that form cannot prevail over substance and that misdescription of the statutory provision invoked is not fatal where the disallowance is correct on substance. The Tribunal also observed that, on the T.V. Sundaram line, the receipt may be taxable as revenue receipt, but declined to decide a new case not taken below. Consequently the Assessing Officer's reduction of WDV was sustained and directions given to verify and, if necessary, withdraw excess depreciation in relevant assessment years. [Paras 6, 9, 10, 11]

Assessing Officer's action in reducing the WDV of the block of plant and machinery is upheld (reduction under Section 43(6) sustained); the CIT(A)'s rejection of invocation of Section 51 is noted but the substantive result is affirmed.

Deletion of disallowance under Rule 8D(ii) of the Income-tax Rules - disallowance under Rule 8D(iii) of the Income-tax Rules and administrative expenses apportioned to exempt income - Whether interest disallowance computed under Rule 8D(ii) should be deleted, and whether disallowance under Rule 8D(iii) has been correctly quantified - HELD THAT: - On facts the CIT(A) found that the assessee had sufficient interest free own funds to cover the investments yielding exempt dividend income and, applying judicial precedents of the jurisdiction, concluded that no one to one nexus need be shown where own funds suffice; the Tribunal agreed and sustained deletion of the disallowance computed under Rule 8D(ii). As to Rule 8D(iii), the CIT(A) quantified a reasonable apportioned administrative expense (approximately 5% of dividend) but did not decide the separate issue of satisfaction by the AO; the Tribunal accepted the principle that only investments yielding exempt income should be considered and, because the CIT(A) had not adjudicated the AO's satisfaction, remitted the Rule 8D(iii) aspect to the CIT(A) for a speaking order and appropriate adjustment. [Paras 20, 21, 22, 24]

Disallowance under Rule 8D(ii) deleted; the assessment on Rule 8D(iii) is remitted to the CIT(A) for fresh speaking determination (considering only investments yielding exempt income and AO's satisfaction).

Allowability of deduction under Section 80IB of the Income-tax Act - Whether income from sale of packing materials credited to unit account is to be excluded in computing deduction under Section 80IB - HELD THAT: - Following the Supreme Court's elucidation in Meghalaya Steel, receipts that reduce the cost of inputs and are credited to the relevant cost head should be treated within business profits and not separately as income outside the business head; where sale proceeds of packing materials effectively reduced the net cost and were included in computation of the unit's profits, denial of Section 80IB relief was not justified. Applying that precedent, the Tribunal set aside the CIT(A)'s rejection and directed the AO to grant the deduction in respect of the packing material receipts. [Paras 26]

Order of the CIT(A) denying Section 80IB benefit on sale proceeds of packing material is set aside and the benefit is directed to be allowed.

Allowability of expenditure under Section 37(1) of the Income-tax Act - Whether expenses incurred in relation to share buyback (lead management fees, advertisement) are revenue in nature and deductible under Section 37(1) - HELD THAT: - On weighing authorities and the factual matrix, the Tribunal found persuasive the Delhi High Court pronouncements that expenses incurred in relation to buyback may be revenue in nature where they do not result in acquisition of an enduring benefit and are matched with relevant revenue accounts; the assessee's submissions and cited precedents supported treatment of the buyback expenses as allowable business expenditure. Respectfully following those precedents, the Tribunal held the expenditure to be revenue and allowed deduction under Section 37(1). [Paras 28]

Expenditure on share buyback disallowed by the AO is held to be revenue in nature and is allowed under Section 37(1).

Final Conclusion: The Tribunal dismissed the Revenue's appeal and partly allowed the assessee's appeal: the reduction of WDV by the forfeited/retained advance was affirmed (sustaining the Assessing Officer's disallowance of depreciation on substance under Section 43(6)), disallowance under Rule 8D(ii) was deleted while the Rule 8D(iii) issue was remitted to the CIT(A) for a speaking determination, Section 80IB relief in respect of packing material receipts was allowed, and share buyback expenditure was held to be revenue and deductible under Section 37(1).

Principle of consistency in tax assessment - business nexus for allowability of revenue expenditure - disallowance under section 40A(2)(b) of the Act (related-party payments) - restriction of disallowance under section 14A to the extent of exempt income - remand for de novo adjudication for want of opportunity and violation of natural justice - treatment of trading debit notes/rate differences as trading expenditure (DOC trading)

Principle of consistency in tax assessment - disallowance under section 40A(2)(b) of the Act (related-party payments) - business nexus for allowability of revenue expenditure - Deletion of disallowance of rent, society maintenance charges and salary paid to related persons where identical payments in earlier scrutiny assessments were consistently accepted - HELD THAT: - The Tribunal accepted the assessee's contention that identical payments to specified persons were allowed in the assessee's own scrutiny assessments for earlier assessment years and there was no change in facts or circumstances in the years under appeal. Applying the principle of consistency as approved by the Supreme Court in Radhasaomi Satsang, the Tribunal held that Revenue was not entitled to take a divergent stand for the year under consideration and directed deletion of the disallowances made under the provisions invoked by the AO/CIT(A). [Paras 3, 9]

Disallowances in respect of rent, society maintenance charges and salary paid to specified related persons deleted.

Determination of estimated net profit for a unit - treatment of further additions after adopting estimated profit - Adoption of 5% of turnover as net profit for Bhilai Unit and consequent exclusion of further additions/disallowances to that estimated profit - HELD THAT: - The assessee's authorised representative agreed to compute net profit of the Bhilai unit at 5% of turnover. The Tribunal held that once net profit is estimated on this basis, no separate addition/disallowance for business expenditure or income pertaining to that unit can be made over and above the estimated profit, and gave effect accordingly. [Paras 4, 5, 10]

Net profit of Bhilai Unit fixed at 5% of turnover; consequent disallowances/additions in relation thereto deleted.

Restriction of disallowance under section 14A to the extent of exempt income - application of Rule 8D computation - Disallowance under section 14A to be limited to the amount of exempt income earned - HELD THAT: - The Tribunal followed the view in Joint Investment Pvt. Ltd. (Delhi High Court) that disallowance under section 14A should be confined to expenditure incurred in relation to exempt income and cannot exceed the exempt income itself. The assessee had earned exempt income of Rs. 1,575 and had voluntarily disallowed Rs. 1,40,392; the AO's additional disallowance computed under the rules was held excessive and the AO was directed to restrict disallowance to the exempt income of Rs. 1,575. [Paras 6]

Section 14A disallowance restricted to the exempt income amount; AO directed to give effect.

Treatment of trading debit notes/rate differences as trading expenditure (DOC trading) - business nexus for trading transactions - remand for de novo adjudication for want of opportunity and violation of natural justice - Rate-difference debit notes of Mauria Merchandise (DOC trading) could not be summarily disallowed; matter remanded to AO for fresh adjudication after affording opportunity - HELD THAT: - The Tribunal analysed the agreement and the factual matrix and concluded that the agreement related to crushing activity and did not preclude claims arising from DOC trading. The CIT(A) had accepted the assessee's explanation regarding the modus operandi of DOC trading and SOPA-determined rates but had not obtained a remand to enable the AO to examine the trading records and SOPA rates; the Tribunal found that principles of natural justice were thereby infringed. Given the factual complexity and documentary material relied upon by the assessee, the Tribunal deemed it appropriate to remand the issue to the AO for de novo adjudication, permitting the assessee to produce further evidence. [Paras 12]

Addition of Rs. 18,00,41,709/- deleted by CIT(A) for now; revenue appeal allowed for statistical purposes and issue remanded to AO for fresh adjudication with opportunity to the assessee.

Business nexus for foreign travel expenses - allowability of promotional overseas travel - Deletion of disallowance of foreign travel expenses where business purpose and resultant increase in turnover were established - HELD THAT: - The AO disallowed foreign travel expenses for lack of proof of business nexus. The CIT(A) verified the board resolution, invoices and the fact that a new product was promoted in Europe resulting in substantial increase in turnover; he found the business nexus established and deleted the disallowance. The Tribunal found no infirmity in the CIT(A)'s factual conclusion and upheld deletion. [Paras 11]

Disallowance of foreign travel expenses deleted; addition upheld in assessment not sustained.

Final Conclusion: For AY 2011-12 and 2012-13 the Tribunal partly allowed the assessee's appeals: deletions ordered in respect of related-party rent/maintenance/salary by applying consistency, Bhilai unit profit fixed at 5% of turnover (precluding further additions for that unit), section 14A disallowance restricted to exempt income, foreign travel expenses disallowance deleted on proof of business nexus; the substantial rate-difference addition arising from DOC trading was remitted to the AO for de novo consideration after affording opportunity to the assessee. Appeals disposed accordingly.

Genuineness of credit and burden of proof under unexplained cash credit - treatment of unsecured loans under section 68 - proof by bank entries and third party litigation outcome - disallowance for failure to deduct tax at source and applicability of provisos to section 40(a)(ia) - remand for verification of payees' returns and certificates where proviso to section 40(a)(ia) is invoked - application of section 14A - disallowance for expenditure attributable to exempt income and requirement of reasoned findings - inadmissibility of adhoc disallowances without specific findings on defects in evidence or personal use

Treatment of unsecured loans under section 68 - proof by bank entries and third party litigation outcome - genuineness of credit and burden of proof under unexplained cash credit - Deletion of addition of Rs. 75,00,000 made under section 68 treating an unsecured loan as unexplained. - HELD THAT: - The Tribunal examined the material placed on record including the judgment of the High Court (dated 23.07.2018) and bank statements showing RTGS credits by the director of the purported creditor. The assessee's explanation that the amount represented repayment to a sister concern (Ram Krishna Electro Component Pvt. Ltd.) pursuant to litigation with M/s High Ground Enterprises Ltd., and that portions of the admitted Rs. 1.5 crore were credited to the assessee's account through the director of the creditor, was supported by the High Court's note that Rs. 1.5 crore had been repaid. The assessee's books also reflected the sister concern as a debtor. In these circumstances the Tribunal held that the source of the credit was not unexplained and that the addition under section 68 could not be sustained. [Paras 8]

Addition made under section 68 of Rs. 75,00,000 deleted.

Disallowance for failure to deduct tax at source and applicability of provisos to section 40(a)(ia) - remand for verification of payees' returns and certificates where proviso to section 40(a)(ia) is invoked - Disallowance of freight payments of Rs. 21,04,667 under section 40(a)(ia) directed to be verified by the Assessing Officer; matter remitted for factual verification. - HELD THAT: - The Tribunal accepted that the statutory proviso (second proviso to section 40(a)(ia) read with the first proviso to section 201) - inserted with effect from 01.07.2012 - exempts disallowance where the payee has shown the receipt in its return and paid tax thereon. The assessee produced returns of the payees indicating they were assessed and had declared the receipts, but the documentary record before the Tribunal was not sufficiently conclusive. Accordingly, rather than decide on the basis of incomplete material, the Tribunal remitted the matter to the AO for verification whether the payees had taken the amounts into account in their returns and paid tax, directing the assessee to co operate and to furnish requisite certificates from the payees/chartered accountants. [Paras 12]

Matter remitted to the Assessing Officer for verification of payees' returns and tax payment; disallowance not sustained pending such verification.

Application of section 14A - disallowance for expenditure attributable to exempt income and requirement of reasoned findings - inadmissibility of additions made without application of mind or reasoned basis - Deletion of addition made under section 14A in respect of interest and bank charges. - HELD THAT: - The AO made an addition under section 14A for interest and bank charges without articulating any reasoning or basis to show that exempt income was earned or that interest bearing funds were diverted to earn exempt income. The assessee had small investments and substantial interest free funds/capital; the specific addition relating to dividend on an unlisted company had already been deleted by the CIT(A). In absence of any finding that borrowed funds were used for earning exempt income or any other reasoned application of section 14A, the Tribunal found the AO's conclusion to be without application of mind and deleted the addition. [Paras 13]

Addition under section 14A deleted.

Inadmissibility of adhoc disallowances without specific findings on defects in evidence or personal use - requirement of particulars or defect finding before making percentage disallowance - Deletion of adhoc 20% disallowance (aggregate Rs. 63,787) made on various expenses for alleged personal element. - HELD THAT: - The AO made an adhoc 20% disallowance across several expense heads on the brief and vague ground that 'element of personal use cannot be ruled out', without identifying any discrepancies in bills or vouchers or any defect in books of account. The Tribunal held that such general and unexplained ad hoc additions lack foundation; where any possible personal element could at best relate to specific heads (car running and telephone), the AO failed to make particularised findings. In absence of specific adverse findings or defective evidence, the adhoc disallowance was unsustainable and was deleted. [Paras 15]

Adhoc disallowance deleted.

Final Conclusion: The appeal is partly allowed: the addition under section 68 (Rs. 75,00,000) and the section 14A and adhoc disallowances were deleted; the section 40(a)(ia) disallowance is remitted to the Assessing Officer for verification of whether the payees have declared the receipts and paid taxes, with direction to the assessee to furnish supporting certificates.

Deduction under Section 54 - utilisation of sale consideration - nexus between sale proceeds and cost of new asset - beneficial construction of exemption - Capital Gains Account Scheme

Deduction under Section 54 - utilisation of sale consideration - beneficial construction of exemption - Capital Gains Account Scheme - Whether entitlement to exemption under Section 54 is dependent upon the assessee having utilized the actual sale consideration of the original asset for acquisition of the new residential house. - HELD THAT: - The Tribunal examined Section 54 and held that the statute prescribes only that the assessee purchase or construct a residential house within the specified period or deposit in the Capital Gains Account Scheme; it does not stipulate that the sale consideration received must be the source of funds used to acquire the new house. The courts lack power to read into the statute an additional condition requiring a direct nexus between the proceeds of sale and the monies applied for the new asset. Reliance was placed on precedents which construed the corresponding provisions (including Section 54F jurisprudence) to the effect that the benefit relates to acquisition of a qualifying new house within the specified time and not to the literal tracing of sale proceeds into the purchase consideration. Applying that principle to the facts, the Tribunal found no statutory basis to deny exemption merely because funds from the spouse were used for the purchase; the assessee satisfied the conditions of Section 54 and had deposited amounts in the Capital Gains Account Scheme as required. Accordingly the Tribunal reversed the view of the lower authorities and directed allowance of the exemption to the extent of investment made in the new house. [Paras 8, 9, 10]

Benefit under Section 54 granted; denial for lack of direct utilisation of sale proceeds set aside and exemption to be allowed to the extent of investment in the new residential property.

Final Conclusion: Appeal allowed. The Tribunal held that Section 54 does not require the sale proceeds of the original asset to be the literal source of funds for the acquisition of the new residential house and directed the Assessing Officer to allow the exemption under Section 54 to the extent of the investment made in the new house.

Computation of book profits under minimum alternate tax - treatment of provisions for diminution in value/revaluation of securities - disallowance under section 14A and Rule 8D in case of banking companies - allowability of expenditure on increase in paid-up capital and amortisation under section 35D - tax treatment of tax on non-monetary perquisites for MAT computation - provision for expenses and applicability of section 40(a)(ia) - prematurity of penalty initiation

Computation of book profits under minimum alternate tax - application of section 115JB to banking companies - Whether the provisions of section 115JB (MAT) apply to the assessee bank for the assessment years under appeal. - HELD THAT: - The Tribunal followed the decision of the Bombay High Court in CIT v. Union Bank of India and the Tribunal's earlier view in the assessee's own case, holding that as the law stood prior to the 2012 amendment the MAT provisions did not apply to a banking company governed by the Banking Regulation Act, 1949. The same conclusion was applied consistently across the years under consideration. [Paras 5, 31]

Provisions of section 115JB are not applicable to the assessee bank for the years in issue; ground allowed.

Treatment of provisions for diminution in value/revaluation of securities - Whether the provision/marked-to-market diminution in value of securities (and loss on revaluation) debited to profit and loss account is taxable disallowable adjustment for computation of book profit. - HELD THAT: - Relying on the Supreme Court decision in HCL Comnet and the Gujarat High Court in Vodafone Essar as applied by the Tribunal and Bombay High Court authorities, the Tribunal held that amounts which are in substance write-offs (i.e., diminution actually effected by reducing the asset) are not covered by the Explanation as amounts set aside as provision. Mark-to-market diminution recorded in accordance with RBI/ banking accounting practice to reflect true financial position was accepted as chargeable to business and not to be mechanically disallowed; the assessing officer was directed to delete the disallowance. [Paras 6, 28]

Disallowance for diminution/revaluation of securities deleted; ground allowed.

Disallowance under section 14A and Rule 8D in case of banking companies - Whether disallowance under section 14A read with Rule 8D is permissible in respect of exempt income earned by the banking assessee. - HELD THAT: - Following the Supreme Court in Maxopp and the Board Circular recognising that income from securities held by banks is attributable to banking business, and consistent tribunal and High Court decisions, the Tribunal found that no disallowance under section 14A / Rule 8D is warranted in case of a banking company whose own funds substantially exceed the investments yielding exempt income. The Tribunal directed deletion of disallowances under the relevant clauses of Rule 8D. [Paras 16, 17, 18, 46]

No disallowance under section 14A/Rule 8D in respect of the assessee bank; disallowances deleted and revenue appeals dismissed on this point.

Allowability of expenditure on increase in paid-up capital and amortisation under section 35D - Whether expenses incurred in connection with increase in paid-up capital are allowable as revenue expenditure or amortisable under section 35D. - HELD THAT: - The Tribunal noted that the assessee produced Annual Report evidence showing additions (branches, ATMs, retail centres) and that the lower authorities did not dispute such additions but required documentary verification linking the infusion of capital to setting up/extension of undertaking. Rather than decide on merits, the Tribunal restored the matter to the assessing officer for verification, directing that opportunity be given to the assessee to substantiate and that relief be allowed if lawfully established. [Paras 21, 22]

Issue remanded to assessing officer for factual verification and consequential relief; allowed for statistical purpose pending verification.

Tax treatment of tax on non-monetary perquisites for MAT computation - Whether tax borne by employer on non-monetary perquisites is required to be added back to book profit for MAT computation under Explanation 1 to section 115JB(2). - HELD THAT: - On the facts and following tribunal precedent, the Tribunal accepted that taxes borne by the employer on non-monetary perquisites form part of employee cost and are akin to fringe benefit type items; they are not to be treated as 'income-tax' within the Explanation to section 115JB(2) requiring addition to book profits. The coordinate decision relied upon was applied to delete the addition. [Paras 37, 40, 41]

Addition for tax on non-monetary perquisites deleted; ground allowed.

Provision for expenses and applicability of section 40(a)(ia) - Whether provisions for expenses (where invoices were not received and payees not identifiable) on which tax was not deducted are disallowable under section 40(a)(ia). - HELD THAT: - The Tribunal upheld the CIT(A)'s conclusion that provisions recorded under the mercantile system for expenses becoming due but not evidenced by invoices and where payees were not identifiable do not attract disallowance under section 40(a)(ia). The assessing officer's satisfaction on identifiability and TDS linkage was not established; subsequent reversal on receipt of bills showed no loss of revenue. [Paras 53, 54]

Disallowance under section 40(a)(ia) deleted; revenue appeal dismissed on this point.

Prematurity of penalty initiation - Whether initiation of penalty proceedings is to be adjudicated at this stage. - HELD THAT: - The Tribunal held that initiation of penalty proceedings was premature and therefore did not adjudicate the substantive penalty question in the appeals; the ground was dismissed as premature. [Paras 33, 43]

Penalty-related grounds dismissed as premature.

Final Conclusion: The appeals by the assessee for AY 2008-09, 2011-12, 2012-13 and 2013-14 are allowed in major respects: MAT provisions under section 115JB do not apply to the banking assessee; disallowances for diminution/revaluation of securities and for section 14A/Rule 8D were deleted; tax on non-monetary perquisites was not required to be added back for MAT; provisions for unidentified expenses were not disallowable under section 40(a)(ia). The claim for amortisation of expenses on increase in paid-up capital is remanded to the assessing officer for factual verification. Penalty proceedings were held premature.

Corporate guarantee not an international transaction - arm's length price adjustment - retention money not income - computation of book profits for Minimum Alternate Tax - exclusion of non-income receipts from book profits - disallowance under section 14A read with Rule 8D - proportionate disallowance of interest and overheads under Rule 8D - import of section 14A disallowance into book profits under section 115JB - provision for leave encashment and section 43B(f) - treatment of statutory cess for deduction purposes

Corporate guarantee not an international transaction - arm's length price adjustment - Deletion of transfer pricing adjustment made by Revenue on account of corporate guarantee given to overseas associated enterprise - HELD THAT: - The tribunal examined the CIT(A)'s reliance on coordinate decisions holding that a corporate guarantee does not constitute an international transaction under the transfer pricing provisions. Having regard to the Explanation to section 92B as amended and the precedents followed by the CIT(A), the tribunal declined Revenue's challenge to the deletion of the arm's length price adjustment levied on guarantee fees. [Paras 4]

Revenue's transfer pricing adjustment in respect of corporate guarantee deleted; Revenue's first substantive ground dismissed.

Retention money not income - computation of book profits for Minimum Alternate Tax - exclusion of non-income receipts from book profits - Whether retention money held by the assessee under turnkey contracts is taxable as income and whether it must be included in book profits for computation under section 115JB - HELD THAT: - On facts identical to earlier decisions of the tribunal and the Calcutta High Court, the tribunal held that retention money arising under turnkey contracts does not vest as enforceable income until contractual conditions are satisfied. Applying the established ratio, such retention money is not in the character of income and therefore, although credited in profit and loss account, it is not to be included in book profits for MAT purposes. The tribunal endorsed the CIT(A)'s reliance on precedent and confirmed deletion of the addition both under normal provisions and for computation of book profits under section 115JB. [Paras 6]

Retention money excluded from total income and from book profits under section 115JB; Revenue's second substantive ground dismissed.

Disallowance under section 14A read with Rule 8D - proportionate disallowance of interest and overheads under Rule 8D - import of section 14A disallowance into book profits under section 115JB - Validity and quantification of disallowance under section 14A r.w. Rule 8D in respect of exempt dividend income and its treatment for computation of book profits under section 115JB - HELD THAT: - The CIT(A) examined the AO's application of Rule 8D and the assessee's documentary showing that investments yielding the exempt dividend were held from earlier years and largely out of own funds. The tribunal agreed that (a) the AO's mechanical application of Rule 8D without addressing the assessee's factual material was incorrect and deleted the disallowance to the extent of direct expenses and proportionate interest where the assessee demonstrated sufficient own funds; (b) however, the tribunal accepted Revenue's contention in relation to administrative/indirect expenditure and directed the AO to compute an appropriate pro rata disallowance of overheads in accordance with binding coordinate decisions; and (c) the addition of a Rule 8D disallowance to book profits under section 115JB was rejected in view of authority that artificial Rule 8D disallowance should not be imported into the book profit computation. [Paras 8, 9]

CIT(A)'s deletion of most of the Rule 8D disallowance affirmed except that administrative/overhead disallowance under section 14A r.w. Rule 8D is restored for computation by the AO; such Rule 8D disallowance shall not be imported into book profits under section 115JB.

Provision for leave encashment and section 43B(f) - Whether provisions for leave encashment constitute admissible deduction under section 43B(f) or are contingent and hence not allowable - HELD THAT: - The tribunal observed that the constitutional and appellate challenge to the statutory provision governing deduction under section 43B(f) (as discussed in Exide Industries Ltd. and subsequent proceedings) is pending before higher forums. In view of the unsettled status of the law and pending final judicial pronouncement, the tribunal directed that the issue be kept in abeyance for a conclusive decision by the higher courts. [Paras 10]

Assessment on leave encashment provision deferred and kept in abeyance pending final judicial determination; AO directed to await higher court outcome.

Treatment of statutory cess for deduction purposes - Allowability of education cess as deductible business expenditure - HELD THAT: - Relying on the reasoning in the cited High Court decision regarding the statutory character of cess and its exclusion from the ambit of deductible 'tax' for the purpose of section 40(a)(ii), the tribunal accepted the assessee's submission that the education cess did not qualify for disallowance and directed deletion of the additions made on that account. [Paras 11]

Additions disallowing education cess deleted; assessee's related grounds partly allowed.

Final Conclusion: For Assessment Years 2010-11 and 2011-12 the tribunal: dismissed Revenue's transfer pricing adjustment on corporate guarantee; confirmed exclusion of retention money from income and from book profits under section 115JB; upheld deletion of most of the Rule 8D disallowance but remitted computation of administrative/overhead disallowance under section 14A r.w. Rule 8D to the AO (while declining import of any artificial Rule 8D addition into book profits); kept the s.43B(f) leave encashment issue in abeyance pending higher court decision; and deleted the education cess disallowance. Appeals disposed in the terms recorded above.

Social Welfare Surcharge as independent levy - debit of duty credit scrips under MEIS/SEIS as a mode of payment - strict construction of exemption notifications issued under section 25(1) of the Customs Act - scope of an exemption notification versus operational conditions for debit - application of Unicorn Industries ratio on independent cesses/surcharges

Social Welfare Surcharge as independent levy - application of Unicorn Industries ratio - Social Welfare Surcharge (SWS) is an independent levy enacted under the Finance Act, 2018 and does not automatically take the colour of the parent customs duty. - HELD THAT: - The Court held that in light of the Supreme Court's decision in M/s. Unicorn Industries, SWS introduced by Section 110(3) of the Finance Act, 2018 is an independent levy imposed and collected under a different enactment and is not to be treated as subsumed by or automatically assuming the character of Basic Customs Duty. Earlier decisions treating such surcharges/cesses as taking the colour of the parent levy cannot be relied upon in view of Unicorn Industries. Consequently SWS is not a part of the customs duty for purposes of construing exemption notifications that refer specifically to duties under the Customs Tariff Act. [Paras 25, 41, 42]

SWS is an independent levy and does not take the colour of the parent customs duty.

Debit of duty credit scrips under MEIS/SEIS as a mode of payment - scope of exemption notifications - Duty credit scrips under MEIS/SEIS operate as instruments having monetary value which may be used to discharge customs duty liabilities; the exemption notifications effectuate payment by debit of scrip value rather than an unconditional abolition of duty liability. - HELD THAT: - Reading Clause 3.02 of the Foreign Trade Policy together with Notification Nos.24/2015 and 25/2015, the Court found the schemes grant 'duty credit scrips' that can be used for payment of Basic Customs Duty and Additional Customs Duty. Clause 2(5) of the notifications contemplates production of the scrip and 'debit of the duties leviable on the goods but for this exemption'. The Court therefore concluded that the notifications do not create a simple, unconditional nil liability; rather they permit discharge of the duty by debiting the scrips. Debiting the scrip, which carries money value, amounts to a mode of levy and collection (neutralisation) even though no cash flows into the Consolidated Fund. [Paras 15, 19, 20, 28, 29]

MEIS/SEIS scrip debits constitute a mode of payment/neutralisation of customs duty and do not render the duty liability non-existent.

Strict construction of exemption notifications issued under section 25(1) of the Customs Act - power to debit surcharges from duty credit scrips - Notification Nos.24/2015 and 25/2015 do not empower the Revenue to debit Social Welfare Surcharge from MEIS/SEIS duty credit scrips; recovery of SWS must be made by other lawful modes. - HELD THAT: - The notifications expressly exempt 'the whole of the duty of customs leviable under the First Schedule to the Customs Tariff Act' and 'the whole of the additional duty leviable under section 3' and condition the exemption on production of scrips 'for debit of the duties leviable on the goods'. Because SWS is an independent levy under the Finance Act and is not mentioned in those notifications, the Court applied the principle that exemption notifications must be strictly construed and held that the Revenue lacks power under those notifications to debit SWS from the scrips. The Court rejected the petitioner's broader contention that all ancillary levies become nil when basic customs duty is debited as nil, relying on Unicorn Industries which disallows importing exemptions to other statutory levies absent explicit coverage. [Paras 17, 19, 31, 38, 42]

Revenue cannot debit SWS from MEIS/SEIS scrips because SWS is not included in the exemptions granted by Notification Nos.24/2015 and 25/2015.

Final Conclusion: Writ petitions disposed: the petitioner must pay the applicable Social Welfare Surcharge on the imported goods, but the Revenue is directed to re-credit SWS amounts already debited from the petitioner's MEIS/SEIS scrips upon the petitioner paying the SWS by cash or other lawful mode within four weeks; on such payment the respondents shall re-credit the scrips within two weeks. No costs.

Safeguard duty - Serious injury - Causal link between increased imports and serious injury - Evaluation of objective and quantifiable factors under the Annex to the Safeguard Rules - Balance of convenience and irreparable injury in interim relief applications - Change in Law clause in power purchase agreements

Balance of convenience and irreparable injury in interim relief applications - Safeguard duty - Grant of interim relief to permit clearance of imported consignments without payment of safeguard duty - HELD THAT: - The Court considered whether ad interim relief previously granted should continue so as to permit clearance of imported solar cells/modules without payment of safeguard duty. It noted that the Directorate General (DG) had conducted an inquiry and recorded detailed preliminary and final findings after hearing interested parties, including the petitioner who participated in the investigation. The Court examined the statutory scheme and the Annex to the Rules requiring evaluation of objective and quantifiable factors, and observed that the DG had taken those factors into account. The Court also considered commercial safeguards available to the petitioner (notably the change of law clause in the Power Purchase Agreement and the Government communication permitting pass-through of changes in duties to procurers) and the practical effect of continued interim relief on the domestic industry. On the balance, continuation of ad interim relief would in substance nullify the effect of the DG's findings and cause irreparable injury to the domestic industry by facilitating entry of low-priced imports that the safeguard measure seeks to check. The Court therefore concluded that the balance of convenience favoured the domestic industry and that interim protection should not be extended. [Paras 25, 26, 29]

The stay application was dismissed; the ad interim relief granted earlier was vacated and no interim orders permitting clearance without payment of safeguard duty were granted.

Evaluation of objective and quantifiable factors under the Annex to the Safeguard Rules - Serious injury - Causal link between increased imports and serious injury - Prima facie validity of the DG's final findings under the Safeguard Rules and Annexure - HELD THAT: - The Court examined the DG's final findings and the material relied upon therein, including data on imports, domestic production, market share, capacity utilisation, sales, inventory and price undercutting. On a prima facie reading the Court found that the DG addressed and recorded objections, set out reasons, and applied the Annex criteria by evaluating relevant objective and quantifiable factors and by addressing causation between increased imports and injury to domestic industry. The Court noted specific findings of the DG concerning increased imports in absolute and relative terms, declining market share of domestic producers, increased inventories and consistent price undercutting by imports, and the DG's conclusion as to threat of injury. Given this record, the Court was unpersuaded that the final findings suffered from manifest non-application of the statutory tests such as would justify interim relief. [Paras 19, 20, 21, 24, 25]

On the prima facie material, the DG's final findings complied with the Rules and Annexure and could not be set aside at the interim stage.

Final Conclusion: The petition for interim relief to clear imported solar cells/modules without payment of safeguard duty was dismissed; the ad interim relief previously granted was vacated. On a prima facie review the Directorate General's final findings complied with the statutory requirement to evaluate objective and quantifiable factors and established a causal link between increased imports and injury, and the balance of convenience favoured protecting the domestic industry, particularly given contractual and regulatory mechanisms that mitigate petitioner's prejudice.

Jurisdiction to issue summons under Section 108 of the Customs Act, 1962 - further investigation required - consideration of representation and documentary record - remand for fresh administrative decision

Jurisdiction to issue summons under Section 108 of the Customs Act, 1962 - consideration of representation and documentary record - further investigation required - Respondent Superintendent of Customs directed to consider the petitioners' representation and accompanying documents and to determine within ten days whether further investigation is required and whether the respondent had jurisdiction in issuing the summons dated 9th July, 2019 and 5th August, 2019. - HELD THAT: - The High Court recorded the factual position that advance Bills of Entry were filed at Kolkata before the vessel was diverted to Kakinada, and that the petitioners had submitted a detailed representation together with documents explaining the diversion and re filing at Kakinada. The court refrained from adjudicating the merits of the underlying importation dispute or from ruling on the validity of the summons. Instead, the court directed the Superintendent of Customs (Preventive), SIB (Port), Customs House, Kolkata to peruse the writ petition and the representation dated 21st August, 2019 and to pass a reasoned order within ten days on (a) whether any further investigation is required and (b) the jurisdictional competence of the respondent to have issued the summons. The court explicitly left all substantive points open for the Superintendent's consideration and noted that the allegations in the writ petition had not been admitted by the respondents.

Petitioner's representation and records to be considered and a reasoned order on jurisdiction and need for further investigation to be passed by the Superintendent within ten days; merits left open.

Final Conclusion: The writ petition was not decided on merits; the Superintendent of Customs was directed to examine the petitioners' representation and documents and to pass a reasoned order within ten days on jurisdiction to issue the summons and on whether further investigation is necessary, with all substantive issues left open for administrative determination.

Right to personal liberty under Article 21 - Right to be informed of grounds of arrest under Article 22(1) - Requirement to record 'reasons to believe' when effecting arrest under the Customs Act, 1962 - Standard of material supporting arrest and remand for investigation - Interim release on writ of habeas corpus subject to conditions

Right to be informed of grounds of arrest under Article 22(1) - Requirement to record 'reasons to believe' when effecting arrest under the Customs Act, 1962 - Right to personal liberty under Article 21 - Lawfulness of the arrest and continued detention of Arvindkumar Jain Dhakad in light of constitutional protections and the requirements of the Customs Act, 1962. - HELD THAT: - The Court examined the arrest memorandum and prosecution remand application and found that the prosecution's material amounted largely to assertion and presumption that the detenue, being a director and father of an accused, was aware of and aided the smuggling. The arrest memorandum did not sufficiently set out the specific "reasons to believe" required to be communicated at the earliest under the statutory scheme and constitutional requirements. The Court noted that the prosecution's averments, as reproduced in the remand application, were prima facie inadequate to meet the statutory standard (including the standard indicated under the provisions relied upon by respondents) and therefore could not sustain continued deprivation of liberty at the interlocutory stage. Applying the principles in the precedents cited by the petitioner regarding strict observance of formal and substantive safeguards when liberty is curtailed, the Court concluded that interim relief was warranted. [Paras 6, 7, 12]

The detention was held prima facie unlawful for want of adequate recorded "reasons to believe" and the detenue was ordered released forthwith subject to specific conditions.

Standard of material supporting arrest and remand for investigation - Interim release on writ of habeas corpus subject to conditions - Challenge to the remand order (alleged mechanical remand) and whether interim relief should be granted despite the prosecution's request for remand to facilitate investigation. - HELD THAT: - The Court considered the remand application and the prosecution's stated grounds for remand, including allegations relating to a larger smuggling syndicate and the need for further investigation. While acknowledging the gravity and economic implications of the alleged offences and the prosecuting agency's practice of seeking judicial remand, the Court found on a prima facie appraisal that the material relied upon did not justify continued custody in the interlocutory stage. Balancing the liberty interest against investigative needs, the Court granted interim release but imposed conditions to safeguard the investigation and ensure the detenue's availability to authorities and the Court. The Court also refused the prosecuting agency's request to stay the interim order. [Paras 11, 14, 15]

Remand order was not allowed to sustain continued custody at this stage; interim release granted with conditions safeguarding investigation and requiring appearance on summons and before the Court.

Final Conclusion: On a prima facie review the Court found the arrest memo and prosecution material did not sufficiently record the requisite "reasons to believe" and, applying constitutional protections and statutory safeguards, ordered immediate interim release of the detenue subject to conditions (attendance on summons, restriction on leaving Mumbai without court permission, prohibition on influencing witnesses), and refused the prosecution's prayer to stay the order; final rights of the parties remain reserved for adjudication.

Validity of adjudication passed beyond prescribed time limit - effect of delay in adjudication - remand for fresh adjudication with a speaking order - disciplinary and appellate remedies for delayed adjudication

Validity of adjudication passed beyond prescribed time limit - effect of delay in adjudication - disciplinary and appellate remedies for delayed adjudication - An adjudication order passed by the Commissioner of Customs beyond the time limit prescribed by Regulation 22 of the Customs House Agent's Licensing Regulations, 2004 does not become void or non est solely on that ground. - HELD THAT: - The Court held that neither the Customs Act, 1962 nor the subordinate rules or regulations provide that exceeding the prescribed time limit renders an adjudication order invalid. Declaring such an effect would amount to an impermissible and adventurous construction of legislative intent. Where an officer delays adjudication unduly, the appropriate consequences lie in departmental disciplinary action or challenge before appellate or revisional forums. Additionally, a party adversely affected by long delay may contest the procedure on grounds such as absence of fairness or arbitrariness insofar as such defects cause prejudice; but delay alone does not automatically nullify the order. [Paras 3]

Delay beyond the regulation's time limit does not by itself render the Commissioner's adjudication void or non est; available remedies are disciplinary action or appellate/revisional challenge, and parties may raise fairness/arbitrariness where prejudice is shown.

Remand for fresh adjudication with a speaking order - Whether the Tribunal's setting aside of the Commissioner's order on the sole ground of delay should be sustained, and the appropriate course of action. - HELD THAT: - The Court set aside the Tribunal's order (which had quashed the Commissioner's order solely on the basis of delay) and remitted the matter to the Tribunal for fresh adjudication. The Tribunal was directed to hear the parties and pass a reasoned (speaking) order within three months of communication of the High Court's order. All substantive points are left open for the Tribunal's consideration except the view that the impugned Commissioner's order was void or non est due to being time-barred. [Paras 4, 5]

Tribunal's order set aside; matter remanded to Tribunal to hear parties and decide afresh by a speaking order within three months, with all points open except the contention that the Commissioner's order was void for delay.

Final Conclusion: The High Court refused to treat delay in adjudication as automatically vitiating the Commissioner's order, set aside the Tribunal's order which had quashed the order on that sole ground, and remitted the matter to the Tribunal for fresh adjudication with a speaking order within three months, leaving all substantive issues open except the contention that the order was void for having been passed beyond the prescribed time limit.

Breach of principles of natural justice - revocation of customs house agency licence - ex parte proceedings - failure to reply to show cause notice - statutory appeal and condonation of delay - hearing on merits by appellate Tribunal - reasoned order within prescribed time - remand to adjudicating authority

Breach of principles of natural justice - failure to reply to show cause notice - ex parte proceedings - Whether the appellant can successfully challenge the revocation order on the ground of breach of natural justice. - HELD THAT: - The Court found that the adjudicating authority's order records, and the fact remains uncontroverted, that the appellant was given a show cause notice and was asked to submit a reply but omitted to do so and did not seek personal hearing. The Commissioner thereupon proceeded ex parte. In these circumstances the Court held that the appellant cannot challenge the revocation order on the ground of breach of the principles of natural justice because the omission to reply and absence of a request for hearing justified the ex parte action of the Commissioner. However, the Court noted that the merits of the appellant's case were not considered by the adjudicating authority.

Challenge on natural justice grounds rejected; ex parte proceedings by the Commissioner not blameworthy.

Statutory appeal and condonation of delay - hearing on merits by appellate Tribunal - reasoned order within prescribed time - remand to adjudicating authority - Whether the appellant is entitled to have the order tested on merits by way of appeal despite delay in filing and what directions should follow. - HELD THAT: - Although the Court refused to sustain a natural justice challenge, it preserved the appellant's right to appeal against the Commissioner's order on merits. Having accepted an explanation for the delay in preferring the statutory appeal, the Court directed that if the appellant files an appeal before the Tribunal within four weeks, the Tribunal shall condone the delay and hear the appeal on merits. The Tribunal is required to give opportunity for written submissions and evidence, hear the parties, and dispose of the appeal by a reasoned order within six months of filing. The Court further empowered the Tribunal, if it deems fit after hearing, to remand the matter to the Commissioner for fresh consideration.

Right of appeal preserved with direction to Tribunal to condone delay, decide merits by a reasoned order within six months, and remit to the Commissioner if necessary.

Final Conclusion: The Court refused to invalidate the revocation on natural justice grounds because the appellant failed to reply to the show cause notice and did not seek hearing, but preserved the appellant's statutory right to appeal; it directed that delay in filing be condoned if the appeal is lodged within four weeks, ordered the Tribunal to hear the appeal on merits with opportunity for submissions and evidence and to pass a reasoned order within six months, and permitted remand to the Commissioner if the Tribunal deems it appropriate.

Refund claim not maintainable unless underlying assessment or self-assessment is appealed and modified - self-assessment constitutes an order of assessment - officer sanctioning refund cannot sit in judgment over an assessment - duty payable as per order of assessment - right to receive speaking order to enable challenge of reassessment - power under Rule 41 of the CESTAT (Procedure) Rules, 1982 to issue directions in the interest of justice

Refund claim not maintainable unless underlying assessment or self-assessment is appealed and modified - self-assessment constitutes an order of assessment - officer sanctioning refund cannot sit in judgment over an assessment - Whether refund claims filed after assessment or self-assessment are maintainable in the absence of challenge to the underlying assessment or self-assessment. - HELD THAT: - The Tribunal applied the binding ratio of the Larger Bench of the Hon'ble Supreme Court in ITC Ltd., and earlier precedents, holding that a refund cannot be sanctioned unless the underlying order of assessment, including self-assessment, is modified by availing the appropriate remedies (appeal/review). The endorsement on the bill of entry or the outcome of self-assessment is an order of assessment; deletion of the phrase "in pursuance of an order of assessment" from Section 27 does not alter the requirement that the assessment must be challenged and modified before a refund is granted. The officer processing a refund claim cannot re-open or set aside an assessment by sanctioning a refund, since that would amount to sitting in appeal over the assessing authority. Consequently, refund claims filed without first getting the assessment or self-assessment modified are not maintainable. [Paras 5, 6]

Refund claims filed without first challenging and obtaining modification of the underlying assessment or self-assessment are not maintainable; the impugned rejection of the refund claims is upheld.

Right to receive speaking order to enable challenge of reassessment - power under Rule 41 of the CESTAT (Procedure) Rules, 1982 to issue directions in the interest of justice - Whether the appellant, having been reassessed and having requested speaking orders which were not issued, is entitled to have speaking orders furnished so as to enable challenge to the reassessments. - HELD THAT: - Although the Tribunal held that refund claims are not maintainable without prior challenge to the assessment, it found that the appellant had been denied the opportunity to understand the reasons for reassessment because speaking orders were not furnished despite requests. In the interest of justice and to enable the appellant to exercise the remedy of appeal against reassessment, the Tribunal exercised its discretionary powers under Rule 41 of the CESTAT (Procedure) Rules, 1982 and directed the assessing officer to issue the requested speaking orders. This direction is procedural and intended to secure the appellant's right to know the grounds of reassessment and to enable a proper challenge before the appellate authority. [Paras 6]

Assessing officer directed to issue speaking orders in respect of the reassessed bills of entry within four weeks to enable the appellants to challenge the reassessments.

Final Conclusion: The appeal is rejected and the impugned order upholding the rejection of the refund claims is affirmed; however, in the interest of justice the assessing officer is directed to issue speaking orders on the reassessments within four weeks so that the appellants may, if aggrieved, pursue appellate remedies.

Special Additional Duty (SAD) - refund under exemption notification - time limit for refund claims (one year) - strict interpretation of exemption notifications - burden of proving applicability of exemption - retrospective application of amending notification

Special Additional Duty (SAD) - refund under exemption notification - time limit for refund claims (one year) - Entitlement to refund of SAD where the refund application was filed after the one year period prescribed in the exemption notification. - HELD THAT: - The appellants had paid SAD on import and filed a refund claim under Notification No.102/2007 Cus as amended by Notification No.93/2008 Cus beyond the one year time limit inserted by the amending notification. The Bench followed the view that an exemption notification creates the right to refund and that all conditions of the notification, including the time limit, must be satisfied to claim relief. Having regard to precedent of the Bombay High Court in CMS Info Systems and consistent decisions of this Bench, the claim filed after the one year period could not be allowed. The Tribunal therefore refused the refund on the ground that the time limit condition in the exemption notification was not complied with. [Paras 6]

Appeal rejected insofar as refund claims filed beyond the one year period; impugned order upheld.

Strict interpretation of exemption notifications - burden of proving applicability of exemption - retrospective application of amending notification - Whether the exemption notification (and its amendment) should be interpreted strictly and whether the amending notification can be applied so as to allow claims filed beyond the stipulated period. - HELD THAT: - The Bench referred to the Five Judge Constitutional Bench decision in Commissioner of Customs (Import) Mumbai v. Dilip Kumar & Co., which held that exemption notifications are to be interpreted strictly and that the burden to prove applicability lies on the assessee; ambiguities favour revenue. Noting conflicting precedents (including the Delhi High Court decision in Sony India which read down the time limit), this Bench followed the strict construction approach endorsed by the Constitutional Bench and the Bombay High Court holding that, absent compliance with all conditions of the exemption notification, including the time limit, no refund arises. Consequently, the amending notification's one year limitation could not be relaxed to permit a belated claim in the facts before this Tribunal. [Paras 5, 6]

Applied the strict interpretation endorsed by the Constitutional Bench; amending notification's one year limit cannot be disregarded to allow belated refund claims.

Final Conclusion: In view of the requirement that exemption notifications be strictly construed and all conditions (including the one year filing limit) be complied with, the appeal is dismissed and the order denying refund of SAD filed after the prescribed period is upheld.

Penalty under Section 114A - Liability to pay customs duty - Definition of importer - Penalty under Section 114AA - Charge of customs duty on imported goods

Penalty under Section 114A - Liability to pay customs duty - Definition of importer - Whether penalty under Section 114A could be imposed on the customs broker (appellant) instead of the importer. - HELD THAT: - The adjudicatory finding is that the statutory charge of customs duty is on the goods imported and the person liable to pay that duty is the importer or exporter. The definition of "importer" includes any person who holds himself out to be importer; in the present case the bills of entry name the main importer and the appellant did not claim to be the importer. Entrustment of clearance to an agent or broker does not convert the broker into the person liable to pay duty for purposes of Section 114A. Section 114A therefore applies to the person determined to be liable to pay duty (the importer) and cannot be invoked to impose that penal liability upon the customs broker whose misconduct consisted in making false or incorrect declarations. Misdeclaration by the broker is addressed by Section 114AA, under which the Deputy Commissioner had imposed a penalty on the appellant which has been paid. The first appellate authority's imposition of penalty under Section 114A on the appellant is therefore incorrect in law. [Paras 7, 8]

Order imposing penalty under Section 114A on the customs broker set aside; Section 114A applies to the importer who is liable to pay duty, while the broker's liability for false declarations is governed by Section 114AA.

Final Conclusion: Appeal allowed; the first appellate authority's order imposing penalty under Section 114A on the customs broker is set aside as Section 114A applies to the person liable to pay duty (the importer); the penalty under Section 114AA imposed on the broker by the Deputy Commissioner stands.

Availability of efficacious alternative remedy by statutory appeal - jurisdiction of the National Company Law Tribunal to entertain applications under the Insolvency and Bankruptcy Code - statutory appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 - principles of natural justice - judicial review under Article 226 of the Constitution of India - stay against encashment of bank guarantee and independent bank guarantees

Availability of efficacious alternative remedy by statutory appeal - statutory appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 - judicial review under Article 226 of the Constitution of India - Whether the writ petition should be entertained despite an alternative statutory remedy being available. - HELD THAT: - The Court declined to enter into the merits because the impugned order of the NCLT is appealable under the Code and an efficacious alternate remedy exists by way of statutory appeal. The existence of a remedy under the Code, and the availability of the appellate forum (NCLAT), weighed against exercise of extraordinary writ jurisdiction under Article 226. The Court observed that even an erroneous order by the NCLT can be corrected on appeal and that there was nothing special or extraordinary warranting invocation of writ jurisdiction in the facts of this case. [Paras 4, 7, 8, 11]

Writ petition not entertained on the ground of availability of efficacious alternative remedy; petitioner directed to avail statutory appeal.

Jurisdiction of the National Company Law Tribunal to entertain applications under the Insolvency and Bankruptcy Code - Whether the NCLT, Principal Bench, New Delhi had power and jurisdiction to pass the impugned order (including a stay against encashment of bank guarantee). - HELD THAT: - The Court held that, on the facts of the present case, the NCLT had power, jurisdiction and authority to decide the matter. It distinguished extreme examples of want of jurisdiction (such as a labour court conducting a criminal trial) and found no comparable absence of jurisdiction in this matter. Any alleged erroneous exercise of jurisdiction was to be addressed by the appellate remedy rather than by writ intervention. [Paras 3, 5, 6]

NCLT had jurisdiction to decide the matter; no writ intervention on jurisdictional grounds.

Principles of natural justice - Whether there was a prima facie violation of principles of natural justice or any constitutional infirmity warranting writ relief. - HELD THAT: - The Court found no prima facie violation of natural justice and noted that it was debatable whether the impugned order was passed without hearing; such questions could be ventilated before the appellate forum. The Court also recorded that the petitioner did not canvass any specific ground of unconstitutionality of the Code nor did the Court find any alleged violation of fundamental rights on the face of the record sufficient to justify writ relief. [Paras 10]

No prima facie violation of natural justice or constitutional infirmity established to justify exercise of writ jurisdiction.

Stay against encashment of bank guarantee and independent bank guarantees - availability of appellate adjudication before the NCLAT - Whether issues raised concerning encashment of the bank guarantee, independent contracts and related contentions are to be decided by the appellate tribunal. - HELD THAT: - The Court expressly permitted the petitioner to raise all issues that were the subject matter of the writ before the Appellate Tribunal (NCLAT), including questions relating to encashment of bank guarantees, independent contracts and the role of other respondents. The order refrained from expressing any view on the correctness of the impugned NCLT order and left all contested issues open for adjudication by the appellate forum. [Paras 12, 13]

All issues are left open to be raised and decided by the NCLAT; the High Court did not express any opinion on their merits.

Final Conclusion: The writ petition was dismissed without adjudication on merits because an efficacious statutory appeal under the Code is available; the NCLT was held to have jurisdiction, no prima facie breach of natural justice or constitutional infirmity was found, and all contested issues (including bank guarantee encashment and independent contracts) were left open for decision by the Appellate Tribunal (NCLAT).

Operational Debt - Operational Creditor - Pre-existing Dispute - Admission under Section 9 of the Insolvency and Bankruptcy Code, 2016 - Corporate Insolvency Resolution Process (CIRP) - Moratorium - Appointment of Interim Resolution Professional

Operational Debt - Operational Creditor - Leasing and letting out of premises amounts to supply of services and the lessor qualifies as an operational creditor; the unpaid rent claimed falls within the definition of operational debt. - HELD THAT: - The Tribunal applied the statutory definitions of Operational Creditor and Operational Debt and held that the lessor's provision of premises is directly related to the input and output of the corporate debtor's supply of services, thereby constituting supply of services. Reliance was placed on the legislative backdrop and the Bankruptcy Law Reforms Committee's observation that a lessor is an operational creditor entitled to monthly rent. On this basis the petitioner is held to be an operational creditor and the unpaid rent claimed is an operational debt. [Paras 11, 12, 13]

The debt claimed for unpaid rent is an operational debt and the petitioner is an operational creditor.

Pre-existing Dispute - Acknowledgement of Debt - There was no pre-existing dispute between the parties before issuance of the Section 8 demand notice; correspondence and the nature of the security deposit did not establish a bona fide dispute. - HELD THAT: - The Tribunal examined communications between the parties and the terms of the security deposit clause. Clause 9.3.2 showed the security deposit's purpose and conditions for refund on handing back possession, and there was no evidence that the petitioner agreed to adjust monthly rent from the deposit prior to demand. The Tribunal rejected the corporate debtor's contention that adjustment was agreed and held that the assumption of extended tenancy was not a plausible defence. Further, the dishonour of cheques led to an inference of acknowledgement of debt rather than a pending dispute, consistent with authority treating NI Act proceedings as admission of debt. Consequently the Tribunal found absence of a pre-existing dispute within the meaning of the Code. [Paras 13, 15, 16, 17]

No pre-existing dispute was shown; the claim is not defeated by any valid dispute existing before the Section 8 demand notice.

Admission under Section 9 of the Insolvency and Bankruptcy Code, 2016 - Corporate Insolvency Resolution Process (CIRP) - Moratorium - Appointment of Interim Resolution Professional - The petition under Section 9 is admitted; CIRP is to be initiated, moratorium declared, an Interim Resolution Professional appointed, and consequential directions issued. - HELD THAT: - Having held that the petitioner is an operational creditor and that no pre-existing dispute existed, the Tribunal concluded that the requirements for admission under Section 9 were met and admitted the petition. The Tribunal directed initiation of CIRP, declared moratorium in terms of the Code, and directed public announcement by the Interim Resolution Professional. The originally proposed IRP lacked required written communication and registration certificate; accordingly the Tribunal nominated a replacement IRP from the IBBI panel. The Tribunal also directed (i) payment by the operational creditor of an initial deposit for IRP expenses, (ii) cooperation by the ex-management in furnishing documents, and (iii) office transmission of the order to relevant parties and ROC for updating records. [Paras 20, 21, 22, 23, 24]

The petition is admitted; CIRP is initiated, moratorium is declared, an IRP is appointed, and ancillary directions are issued.

Final Conclusion: The Tribunal held that the lessor is an operational creditor and the unpaid rent is an operational debt; no pre-existing dispute was proved, the Section 9 petition was admitted, CIRP was initiated, moratorium declared and an Interim Resolution Professional was appointed with directions for announcement, deposit for IRP expenses, cooperation from ex-management and communication of the order.

Restoration of appeal - condonation of delay - sufficient cause / inordinate delay - prejudice by laches and acquiescence - duty of vigilance by litigant/advocate

Restoration of appeal - condonation of delay - sufficient cause / inordinate delay - prejudice by laches and acquiescence - duty of vigilance by litigant/advocate - Application for restoration of appeal dismissed for want of merit. - HELD THAT: - The Tribunal examined the application for restoration filed long after the appeal was dismissed for default and found multiple fatal defects. The restoration application was not filed by the appellant-company nor supported by any affidavit of the appellant; it was filed by an advocate who did not expressly state she acted on behalf of the appellant and no affidavit from the appellant was placed on record. There was an unexplained and inordinate delay of about 1350 days between dismissal and filing of the restoration application, and no separate application or prayer for condonation of that delay was made. The explanations offered (illness and subsequent death of the advocate's father and illness of her mother) were not substantiated by documentary evidence despite an undertaking to produce hospitalization records, and the asserted short-term non-availability of one counsel did not justify the prolonged inaction given that the appellant had engaged multiple advocates and the appeal was part-heard with repeated opportunities afforded by the Bench. The Tribunal applied the principles articulated by the Supreme Court on condonation of delay, observing that while a liberal, justice-oriented approach is appropriate, it must be exercised within reason and supported by bona fide, sufficient cause. In the present facts there was gross negligence and lack of adequate explanation for the prolonged dormancy, and the respondent had acquired rights and would be prejudiced by restoration. Applying these considerations, the Tribunal concluded that the applicant had not shown sufficient cause to condone the delay or to justify restoration. [Paras 21, 24, 25]

Restoration application dismissed.

Final Conclusion: The application for restoration of the appeal was dismissed for lack of merit: it was not filed by the appellant or supported by its affidavit, carried an unexplained and inordinate delay without any prayer for condonation, failed to produce supporting evidence for the reasons stated, and restoration would prejudice the respondent; accordingly the restoration is refused.

Limitation for adjudication - Section 73(4B) of the Finance Act, 1994 - time period for passing adjudication order - statutory requirement to decide within prescribed time where possible - refund of deposited amount where show-cause notice quashed

Limitation for adjudication - Section 73(4B) of the Finance Act, 1994 - time period for passing adjudication order - Whether the adjudicating authority was required to decide the show-cause notice within the time prescribed by Section 73(4B) and whether failure to do so vitiates the proceedings in the present case. - HELD THAT: - The Court interpreted sub-section (4B) of Section 73 as fixing the time within which the Central Excise Officer must adjudicate a show-cause notice, namely six months or one year as prescribed by Clauses (a) and (b), and observed that the limitation period for passing the adjudication order runs from the date of the notice under sub-section (1). The Court further held that even where no specific time is prescribed, a statutory authority must exercise its jurisdiction within a reasonable period and failure to do so will vitiate the proceedings. Applying these principles to the present facts, the Court found from the respondents' own chronology that arguments concluded on 3.2.2015 and it was possible for the adjudicating authority to decide the matter within one year thereafter; that possibility was not availed of. Consequently, the statutory time-limit under Section 73(4B) was not complied with and the adjudication proceeded in breach of the prescribed limitation. The Court therefore allowed the writ petition on the short ground of limitation. [Paras 11, 12, 13, 14]

Show-cause notice dated 25th November, 2011 quashed for failure to adjudicate within the time prescribed by Section 73(4B); respondents directed to refund the deposited amount to the petitioner within four weeks.

Final Conclusion: Writ petition allowed on limitation grounds; adjudication under the show-cause notice is quashed and the deposited amount is to be refunded to the petitioner within four weeks.

Principle of mutuality - tax liability of incorporated members' clubs - scope of Explanation 3 to the definition of 'service' in relation to unincorporated associations and bodies of persons - negative list regime and the definition of 'person' post-2012

Tax liability of incorporated members' clubs - principle of mutuality - scope of Explanation 3 to the definition of 'service' in relation to unincorporated associations and bodies of persons - Validity of demand of service tax (and attendant penalties) confirmed against the petitioner qua Show Cause Notice SL.No.33/2014-ST(JC) dated 21.04.2014 for the period 01.10.2008 to 31.01.2014. - HELD THAT: - The High Court, following the decision of the Hon'ble Supreme Court in State of West Bengal and Others v. Calcutta Club Ltd and Chief Commissioner of Central Excise and Service Tax v. Ranchi Club Ltd (2019), held that incorporated members' clubs are not liable to service tax for services rendered to their members under the pre-2012 scheme. The Supreme Court construed the definitions and statutory scheme to conclude that the expression 'body of persons' and the statutory explanations do not include bodies corporate or incorporated cooperative societies, and that the doctrine of mutuality applies so that no activity by a members' club can be treated as an activity carried out by one person for another for consideration. Further, Explanation 3 to the post-2012 definition was interpreted as applying to unincorporated associations or bodies of persons and not to incorporated clubs; consequently the post-2012 negative-list definition does not alter the position of incorporated clubs. Applying that ratio, the court found the confirmed demand (and associated penalty under Section 78 and token penalty under Section 77 as recorded in the impugned order) attributable to the first Show Cause Notice to be unsustainable and liable to be quashed. [Paras 20, 21, 22, 23]

Impugned Order-in-Original No.4/2016 dated 07.01.2016 is quashed insofar as it confirms demand against Show Cause Notice SL.No.33/2014-ST(JC) dated 21.04.2014 for the period 01.10.2008 to 31.01.2014.

Final Conclusion: Writ petition allowed; demand confirmed by the impugned order in respect of Show Cause Notice SL.No.33/2014-ST(JC) dated 21.04.2014 (period 01.10.2008 to 31.01.2014) quashed in view of the Supreme Court's decision that incorporated members' clubs are not taxable for services to their members; liberty granted to challenge the separate demand arising from the second Show Cause Notice.

Refund of service tax on services used for export - co-relation between input services and exports - self-certification/Chartered Accountant's certification - non-compliance with notification conditions - broad correlation evidence for GTA services in bulk cargo - C.B.E. & C. Circular No. 120/01/2010-S.T. - procedural relaxation of one-to-one correlation

Non-compliance with notification conditions - refund of service tax on services used for export - Entitlement to refund of service tax paid on GTA services where lorry receipts do not contain reference to the export invoice as prescribed by the Notification. - HELD THAT: - The Tribunal examined whether strict compliance with the condition in the Notification requiring reference to the exporter's invoice in the lorry receipts was mandatory to deny the refund. While acknowledging that the stipulated condition was not complied with, the Tribunal placed the matter in the context of circulars and precedents addressing practical difficulties in bulk cargo exports. It noted that for bulk shipments the shipping documents and export invoices may be prepared after aggregation at the port and that mere absence of invoice reference on each lorry receipt does not conclusively negate the claim of export. Applying the reasoning in the cited Tribunal decision (Jumbo Mining Ltd.) and the clarificatory instructions in C.B.E. & C. Circular No. 120/01/2010-S.T., the Tribunal held that a rigid, literal application of the notification condition would defeat the policy objective of not exporting domestic tax and that the refund claim could be permitted if an acceptable co-relation between transport services and exports is established.

The Tribunal allowed the appeal and rejected the strict denial of refund solely on the ground that lorry receipts did not reference the export invoice.

Co-relation between input services and exports - self-certification/Chartered Accountant's certification - C.B.E. & C. Circular No. 120/01/2010-S.T. - procedural relaxation of one-to-one correlation - broad correlation evidence for GTA services in bulk cargo - Whether broad correlation supported by a Chartered Accountant's certificate and documentary material suffices for sanctioning refund claims under the Notification. - HELD THAT: - The Tribunal referred to the Circular which envisaged simplification by allowing self-certification or Chartered Accountant's certification to establish nexus between input services and exports and to reduce onerous one-to-one correlation scrutiny. It accepted that in the factual matrix of bulk exports (where aggregation at port and post-loading invoicing occur) a broad correlation - demonstrable by transport documents, challans, and a CA certificate correlating quantities transported with quantities exported - suffices for adjudication. The Tribunal observed that the Revenue did not place before the Bench material to negativate such correlation and therefore a liberal view as contemplated by the Circular and consistent with Tribunal precedent was warranted.

A broad co-relation supported by a Chartered Accountant's certificate and corroborative transport/export documents is sufficient to entertain and allow the refund claim under the Notification.

Final Conclusion: The impugned appellate order rejecting the refund claim was set aside and the original order restored; the appeal is allowed and the refund claim is to be considered/granted in accordance with the Tribunal's reasoning and the Circular, with consequential benefits.

Refund of unutilised Cenvat credit - non-transferability of cesses on transition to GST - scope of section 11B - refund of duty paid and not of credit - limited cash refund under Rule 5 of Cenvat Credit Rules in case of exports - distinction between carry forward of credit into GST and cash refund of credit

Refund of unutilised Cenvat credit - scope of section 11B - refund of duty paid and not of credit - limited cash refund under Rule 5 of Cenvat Credit Rules in case of exports - distinction between carry forward of credit into GST and cash refund of credit - Whether the appellant is entitled to cash refund of unutilised Cenvat credit relating to EC, SHEC and KKC on transition to GST. - HELD THAT: - The Tribunal held that section 11B of the Central Excise Act provides for refund of duty paid and does not permit refund of accumulated Cenvat credit. Under the Cenvat scheme, duties/cesses take the form of credit which can be utilised towards duty/service tax/cess on output; there is no general provision for cash refund of such credit except as specifically provided by Rule 5 of the Cenvat Credit Rules (permiting refund where Cenvat credit has been utilised in manufacture of exported goods or services). The Larger Bench of the Bombay High Court has answered similar questions in the negative on whether cash refund of unutilised Cenvat credit is permissible, and the Madras High Court decision relied on by the appellant concerned a different question (carry forward into GST) and did not decide entitlement to cash refund. Applying these principles to the admitted facts (cess credits could not be carried forward to GST), there is no legal provision to grant a cash refund of the unutilised Cenvat cess credits in the present case. [Paras 3, 6, 7]

No cash refund of the unutilised Cenvat credit relating to EC, SHEC and KKC is permissible; appeal rejected and impugned order upheld.

Final Conclusion: The appeal is dismissed: the accumulated unutilised Cenvat credit on account of EC, SHEC and KKC cannot be refunded in cash under section 11B or otherwise except as permitted under Rule 5 of the Cenvat Credit Rules (in the specific context of exports); therefore the impugned orders rejecting the refund claim are upheld.

Business Support Service - scope of exclusive definition - Negative List regime and taxability of agreed-to services - proviso to Section 73(1) relating to extended period of limitation for fraud/suppression/wilful mis-statement - suppression of facts - knowledge of Department from statutory documents

Business Support Service - scope of exclusive definition - Negative List regime and taxability of agreed-to services - Branch Network Fee received under the agreements is taxable under Business Support Service - HELD THAT: - The Tribunal found that the exclusive definition of Business Support Service covers specific activities expressly listed and does not extend to a mere contractual obligation to 'keep intact' and grant access to a branch network when called upon. The appellant was not alleged to have rendered any of the specific activities covered by the definition during the relevant period; it had only agreed to grant access. The court held that, prior to the Negative List regime (effective from 01.07.2012), mere agreement to provide services did not constitute a taxable event under the service tax law. In absence of evidence that the appellant actually provided the specified business support activities, the demand could not be sustained on merits under Business Support Service. [Paras 10, 12, 14, 15]

Demand under Business Support Service set aside - Branch Network Fee not taxable on merits

Proviso to Section 73(1) relating to extended period of limitation for fraud/suppression/wilful mis-statement - suppression of facts - knowledge of Department from statutory documents - Whether the extended period of limitation under the proviso to Section 73(1) could be invoked for the claimed periods - HELD THAT: - The Tribunal held that invocation of the extended period under the proviso to Section 73(1) requires positive evidence of fraud, collusion, wilful mis-statement or suppression of facts. Here the particulars forming the basis of demand (network access fee) were recorded in statutory documents - balance-sheet, P&L schedules and ST-3 returns - which were in the possession or within the knowledge of the Department. The Department conducted audits and relied upon those statutory records in issuing the Show Cause Notice. Where material facts are within the knowledge of the Department, suppression cannot be established and the pre-conditions for the proviso are not met; consequently the extended five-year period cannot be invoked and the proceedings are barred by limitation beyond the normal period. [Paras 11, 16, 17]

Extended period not invokable; proceedings barred by limitation and appeal allowed on limitation ground

Final Conclusion: The appeal is allowed on merits and on limitation: the Branch Network Fee is not taxable as Business Support Service for the stated periods, and the extended period of limitation under the proviso to Section 73(1) cannot be invoked as there was no suppression of facts.

Refund under Rule 5 of the CENVAT Credit Rules, 2004 - time limit for refund claims under Section 11B - counting one year from the end of the quarter for export of services - nexus between input services and exported service - admissibility of CENVAT credit on general insurance service - requirement of remittance/receipt of payment for refund

Time limit for refund claims under Section 11B - counting one year from the end of the quarter for export of services - refund under Rule 5 of the CENVAT Credit Rules, 2004 - Refund claims for the quarters January-March 2015 and April-June 2015 are not time-barred. - HELD THAT: - The Tribunal applied the Larger Bench ruling in Span Infotech (India) Pvt Ltd which held that for export of services, where refund claims are filed on a quarterly basis the one-year period under Section 11B is to be counted from the end of the relevant quarter. Applying that principle, the refund claims filed on 11/03/2016 for the quarters January-March 2015 and April-June 2015 fall within one year from the end of those quarters and thus cannot be rejected as time-barred. The appellant conceded the claim for October-December 2014, which was held to be beyond the time limit. [Paras 7]

Refund claims for January-March 2015 and April-June 2015 are timely; refund claim for October-December 2014 is rejected.

Refund under Rule 5 of the CENVAT Credit Rules, 2004 - time limit for refund claims under Section 11B - The refund amount earlier objected as pertaining to an earlier period (Rs. 5,55,616/-) is admissible because the claim was filed within time. - HELD THAT: - Having determined that the relevant quarters fall within the one-year period counted from the end of the quarter, the amount earlier characterised as pertaining to an earlier period cannot be rejected on the ground of time-bar. The Tribunal therefore held the said refund admissible to the appellant. [Paras 8]

The refund claim earlier rejected as pertaining to an earlier period is admissible.

Nexus between input services and exported service - admissibility of CENVAT credit on general insurance service - refund under Rule 5 of the CENVAT Credit Rules, 2004 - Refund cannot be denied on the ground that the input service lacked nexus when CENVAT credit was originally availed without objection; the appellant is entitled to refund of CENVAT credit on general insurance service. - HELD THAT: - The Tribunal relied on earlier authority in Verisign Services India Pvt Ltd holding that availment of CENVAT credit cannot be disputed at the refund stage if it was not questioned at the time of availment. The insurance services were availed in relation to movable assets used to provide the output service, and Tribunal precedent including Sarita Handa Exports (P) Ltd recognises direct nexus for such insurance services. The appellant disclaimed the claim in respect of tour operator service; however, on merits the general insurance service credit is recoverable in refund proceedings. [Paras 9]

Refund on general insurance service is allowable; refund claimed for tour operator service is not pursued and is rejected.

Requirement of remittance/receipt of payment for refund - refund under Rule 5 of the CENVAT Credit Rules, 2004 - There is no legal requirement that payment must have been received from the service recipient before a refund under Rule 5 can be entertained. - HELD THAT: - The Tribunal observed that no provision requires receipt of remittance from the service recipient as a condition precedent to entertain a refund application. The appellant had provided the exported services and obtained FIRCs; absence of remittance receipt therefore does not preclude the refund claim. [Paras 10]

Refund admissibility is not contingent on receipt of remittance from the service recipient.

Final Conclusion: The appeal is allowed in part: refunds for the quarters January-March 2015 and April-June 2015 and the CENVAT credit on general insurance service are granted; the refund for October-December 2014 and the claim relating to tour operator service are refused. The impugned order is modified accordingly with consequential relief.

Mobilisation advance - service tax liability - CENVAT credit - common input services - Rule 6(2) - maintenance of separate records for common inputs and input services - Rule 6(3) and Rule 6(3A) - formulaic reversal of CENVAT credit for exempted services - opportunity of being heard and verification on remand

Mobilisation advance - service tax liability - Verification of whether service tax on mobilisation advances has been fully discharged by the appellant and, if not, re determination of any outstanding liability. - HELD THAT: - The appellant did not press the substantive challenge to levy of service tax on mobilisation advances and produced a Chartered Accountant's certificate said to show full discharge of the tax liability. The Tribunal, however, noted conflicting contentions in the lower records regarding partial payment and the department's claim of unadjusted amounts. Given these factual disputes and documentary assertions, the matter is not finally adjudicated on merits by the Tribunal but is remitted for verification. The original authority is directed to give the appellant an opportunity to produce and have verified the supporting documents (including the CA certificate and ST 3 returns or other records) and thereafter to re determine the tax and interest, if any, in accordance with law. [Paras 5]

Remanded to the original authority for verification of the service tax payment on mobilisation advances and re determination of any outstanding liability after giving the appellant an opportunity of being heard.

CENVAT credit - common input services - Rule 6(2) - maintenance of separate records for common inputs and input services - Rule 6(3) and Rule 6(3A) - formulaic reversal of CENVAT credit for exempted services - Verification of the amount of CENVAT credit reversed by the appellant in respect of common input services and the correctness of the calculation against the demand under Rule 6(3). - HELD THAT: - The appellant asserted that it proportionately reversed CENVAT credit attributable to exempted services and relied on ST 3 returns and a Chartered Accountant's certification showing a specific reversal amount. The lower authority recorded absence of the relevant supporting returns and rejected the claim, upholding the demand under Rule 6(3). The Tribunal found that the factual contention as to reversal and the method of calculation require fresh verification rather than final adjudication by the Tribunal. Accordingly, the matter is remitted to the original authority to examine the claimed reversals, require production of calculations and supporting ST 3 returns or other records, afford the appellant an opportunity of being heard, and thereafter re determine the credit position and any consequent demand in accordance with Rule 6(2)/6(3). [Paras 5]

Remanded to the original authority for verification of the claimed reversal of CENVAT credit on common input services and for re computation of any demand under Rule 6(3) after giving the appellant an opportunity to produce supporting documents.

Final Conclusion: The appeal is disposed of by remanding the matters to the original authority for verification: (a) of the payment of service tax on mobilisation advances, and (b) of the claimed reversal and calculation of CENVAT credit on common input services; the original authority shall afford the appellant an opportunity of being heard and thereafter re determine tax/credit liability, interest and consequential levy, if any.

Refund of Cenvat credit under Rule 5 of the CENVAT Credit Rules, 2004 - procedure, safeguards, conditions and limitations under Notification No.27/2012-CE (NT) dt.18.06.2012 - time limit for refund claim in export of services - one year from receipt of payment in convertible foreign exchange - sanction of refund subject to verification of realisation of foreign exchange and documentary proof

Refund of Cenvat credit under Rule 5 of the CENVAT Credit Rules, 2004 - time limit for refund claim in export of services - one year from receipt of payment in convertible foreign exchange - procedure, safeguards, conditions and limitations under Notification No.27/2012-CE (NT) dt.18.06.2012 - Whether the first appellate authority was correct in denying refund of Cenvat credit to the extent claims were filed beyond one year from realisation of foreign exchange under the Notification. - HELD THAT: - The claim for refund of Cenvat credit is governed by Rule 5 of the CENVAT Credit Rules, 2004 and the procedural safeguards, conditions and limitations specified in Notification No.27/2012-CE (NT), which requires service-export refund claims to be filed within one year from the date of receipt of payment in convertible foreign exchange (para 3(b)(ii)). The first appellate authority examined the dates of realisation for specific invoices and found the refund applications in respect of those invoices were submitted after the one-year period prescribed by the notification. On appeal before this Tribunal the appellant failed to produce any documentary evidence to show earlier dates of foreign exchange realisation or that the refund claims were filed within the statutory one-year period. The appellate authority therefore correctly limited the refunds by disallowing only that part of the claims which were time-barred under the notification, without denying refunds otherwise admissible. The Tribunal finds no error in the application of the time-limit provision or in the factual conclusion that the challenged claims were beyond one year, and accordingly upholds the modification made by the first appellate authority. [Paras 8, 9, 10, 11]

The appeals are rejected and the orders of the first appellate authority disallowing refunds filed beyond one year from date of realisation of foreign exchange are upheld.

Final Conclusion: The Tribunal affirms the first appellate authority's modification of the original refund sanctions to the extent that refund claims were filed beyond the one-year period prescribed by Notification No.27/2012-CE (NT); the impugned orders are upheld and the appeals are dismissed.

Refund of erroneously paid tax - passing on of tax burden - no refund where tax collected from customers - Section 11B - deposit to Consumer Welfare Fund (as applied to Service Tax by Section 83) - no provision for adjustment between registered taxpayers

Refund of erroneously paid tax - passing on of tax burden - no refund where tax collected from customers - Refund claim by the appellant who paid service tax but recovered the amount from customers is not admissible. - HELD THAT: - The Tribunal found as an undisputed fact that the appellant had collected from its customers the service tax which it had paid. Following settled law that a tax which has been passed on to the consumer cannot be refunded to the person who has recovered it, the refund claim was held not admissible. The Court relied on the principle in Mafatalal Industries to the effect that where the tax burden has been passed on, the payer cannot claim refund. The applicability of Section 11B as made applicable to Service Tax by Section 83 was noted to reinforce that an amount recovered from customers and paid as tax cannot be refunded to the collector. [Paras 4, 5]

Refund claim rejected as inadmissible because the appellant had collected the tax from its customers.

No provision for adjustment between registered taxpayers - Section 11B - deposit to Consumer Welfare Fund (as applied to Service Tax by Section 83) - Request to adjust the amount allegedly payable by the developer against the developer's tax liability was denied. - HELD THAT: - The Tribunal held that there is no statutory provision permitting transfer or adjustment of tax amounts from the account of one registered taxpayer to that of another. Further, where the amount has been paid and recovered from customers, Section 11B (as applied to Service Tax matters) requires such sums to be credited to the Consumer Welfare Fund rather than being treated as transferable tax credits between different taxpayers. Consequently the appellant's alternate plea for adjustment against the developer M/s M. Construction Co. & Associates could not be acceded to. [Paras 4, 5]

Request for adjustment against the developer's tax liability refused; no legal basis for inter-taxpayer adjustment and amount to be dealt with under Section 11B.

Final Conclusion: The appeal is dismissed: the refund claim was rightly rejected because the appellant had passed on the tax burden to its customers and, in any event, there is no provision to transfer or adjust the paid amount to another taxpayer; such amounts fall to be dealt with under Section 11B as applied to Service Tax.

Clandestine removal of excisable goods - evasion of excise duty - perversity - requirement of a reasoned order by appellate authority - remand for fresh hearing and decision

Perversity - clandestine removal of excisable goods - evasion of excise duty - The Tribunal's order setting aside the Commissioner's findings was perverse and therefore liable to be set aside. - HELD THAT: - The Commissioner had recorded extensive evidence and detailed reasons concluding there was clandestine removal of excisable goods and large-scale evasion of excise duty. The Tribunal's order overturning that conclusion contained grossly inadequate and unconvincing reasons. Given the evidentiary basis and detailed reasoning in the Commissioner's order, the High Court found perversity in the Tribunal's conclusion and held that the Tribunal's order could not stand without cogent supporting reasons, particularly in a matter involving substantial revenue.

Tribunal's order dated 23rd July, 2018 set aside on the ground of perversity.

Requirement of a reasoned order by appellate authority - remand for fresh hearing and decision - The matter is remanded to the Tribunal for fresh hearing and for passing a reasoned order after hearing the parties. - HELD THAT: - Because questions of fact are involved and the Tribunal's order lacked adequate reasoning, the High Court did not adjudicate the factual controversy itself. Instead, the Court directed that the Tribunal should hear the matter afresh and pass a reasoned order after hearing the parties. The remand is for fresh consideration by the Tribunal and not for merely mechanical compliance; the Tribunal must record cogent reasons for its conclusion. The Tribunal was directed to decide the matter within six months of communication of the High Court's order.

Proceedings remitted to the Tribunal to hear the parties afresh and pass a reasoned order within six months.

Final Conclusion: The appeal was allowed to the extent that the Tribunal's order of 23rd July, 2018 was set aside for perversity and the matter remitted to the Tribunal for fresh hearing and a reasoned decision within six months.

Principal-agent relationship - liability for excise duty where goods are manufactured by a job-worker - absence of a substantial question of law - appellate review limited by perversity standard in fact-finding

Principal-agent relationship - liability for excise duty where goods are manufactured by a job-worker - Relationship between the assessee and the job-worker was one of principal and agent and the assessee remained liable to pay excise duty notwithstanding the manufacturing operations carried out by the job-worker. - HELD THAT: - The agreement placed on record (dated 12th August 2009) establishes that the assessee (appellant) supplied raw materials to the job-worker who, after performing the agreed operations, returned the finished goods to the assessee. The court accepted the learned tribunal's finding that this contractual arrangement amounted to a principal-agent relationship. Consequent upon that factual conclusion, the assessee could not avoid excise duty liability by characterising the contract as between two principals or by asserting that the job-worker's manufacture displaced the assessee's responsibility to discharge excise duty. The High Court found no perversity in the tribunal's fact-finding and endorsed its legal result.

Finding that the parties stood in a principal-agent relationship and that the assessee was liable to pay excise duty was upheld.

Absence of a substantial question of law - appellate review limited by perversity standard in fact-finding - No substantial question of law arose for consideration and the tribunal's factual conclusions did not suffer from perversity, thus warranting dismissal of the intended appeal. - HELD THAT: - The High Court examined the record and concluded that the appeal did not raise any substantial question of law. It further held that the learned tribunal's conclusions on facts were not perverse and therefore did not merit interference on appeal. In view of these findings, the High Court exercised its appellate power to dismiss the appeal and the related stay application.

Appeal dismissed for lack of any substantial question of law and because the tribunal's fact-finding was not perverse.

Final Conclusion: The High Court upheld the tribunal's conclusion that the contract evidenced a principal-agent relationship making the assessee liable for excise duty, found no substantial question of law or perversity in the tribunal's findings, and dismissed the appeal and the stay application without costs.

Abandonment or withdrawal without permission to institute a fresh proceeding and its preclusive effect - extension of Order XXIII Rule 1 CPC principle by analogy to writs and analogous appellate proceedings - distinction between abandonment/withdrawal and res judicata - absence of liberty to refile bars subsequent appeal under statutory appellate regime - invito beneficium non datur (waiver or abandonment results in loss of right)

Abandonment or withdrawal without permission to institute a fresh proceeding and its preclusive effect - absence of liberty to refile bars subsequent appeal under statutory appellate regime - Whether the present appeals are barred because earlier appeals were withdrawn without obtaining permission to file fresh appeals. - HELD THAT: - The Court held that the appellant withdrew earlier Central Excise Appeals without seeking or obtaining leave to file fresh proceedings and did not reserve liberty to challenge the CESTAT order later. Applying the doctrine that withdrawal or abandonment without permission precludes instituting a fresh suit or proceeding, the Court concluded that the appellant cannot now revive the same challenge by filing these appeals. The reasoning draws on the principle that a litigant who abandons or withdraws a remedy without the required permission loses the right to invoke that remedy again, and that allowing repetition would encourage abuse of process. [Paras 2, 3, 5, 6]

The appeals are barred and liable to be dismissed because the earlier withdrawals were made without permission to institute fresh proceedings.

Extension of Order XXIII Rule 1 CPC principle by analogy to writs and analogous appellate proceedings - distinction between abandonment/withdrawal and res judicata - invito beneficium non datur (waiver or abandonment results in loss of right) - Whether the principles laid down in Sarguja Transport (regarding withdrawal without permission and its application to writ petitions) apply to appeals under Section 35G of the Central Excise Act, 1944. - HELD THAT: - Relying on the Supreme Court's exposition in Sarguja Transport, the Court accepted that the public policy underlying Order XXIII Rule 1 CPC - that withdrawal of a proceeding without leave to refile precludes a fresh proceeding in respect of the same subject-matter - is extendable by analogy to other extraordinary remedies and to appellate proceedings. The Court emphasised the distinction from res judicata: withdrawal without permission operates as abandonment of the remedy rather than as a prior adjudication, yet it prevents re litigation to curb abuse of process. Applying this principle to the statutory appeal under Section 35G, the Court found the principle applicable and dispositive. [Paras 4, 5]

The Sarguja Transport principle is applicable by analogy to appeals under Section 35G, and its application bars the present appeals.

Final Conclusion: The appeals are dismissed on the ground that earlier appeals were withdrawn without permission or liberty to refile; the Court applied the Supreme Court's principle that withdrawal without leave precludes instituting fresh proceedings, and held that principle to be applicable by analogy to appeals under Section 35G of the Central Excise Act, 1944; dismissal is ordered without costs.

Limitation and extended period - declaration under Rule 173(c) of Central Excise Rules, 1944 - suppression of facts and estoppel by disclosure - includability of free supplied packing material in transaction value

Limitation and extended period - declaration under Rule 173(c) of Central Excise Rules, 1944 - suppression of facts and estoppel by disclosure - Whether the demand for periods beyond one year from the date of the Show Cause Notice is time barred where the assessee had disclosed receipt of free supplied packing material in its declaration. - HELD THAT: - The Tribunal found that the assessee had, by its declaration filed under the erstwhile Central Excise Rules (answer to the question in Rule 173(c)), expressly disclosed that laminated paper sleeves were supplied free of cost by the buyer and that such supply had no impact on assessable value. That disclosure was an existing record available to the Department. In these circumstances the Department, if aggrieved, could have issued a Show Cause Notice within the normal one year period; failure to do so disentitles the Department from invoking the extended period. The Adjudicating Authority's contrary finding that the earlier declaration (filed in 2001) was irrelevant to the period 2003-2007 was rejected: a prior disclosure of the operative fact precludes a finding of suppression and bars extended period demands. The Tribunal also applied its earlier decision in the assessee's identical matter to the present facts and set aside the demand for the extended period without deciding the merits on valuation. [Paras 5, 6, 7]

Demand beyond one year from the date of the Show Cause Notice is time barred and the impugned order is set aside on limitation grounds; appeal allowed on time bar without adjudicating merits.

Final Conclusion: The appeal is allowed solely on limitation: demands for the period April, 2003 to March,2007 that fall beyond the normal one year limitation are set aside because the assessee had disclosed receipt of free supplied packing material to the Department, precluding a finding of suppression and barring invocation of the extended period.

Validity of Rule 8(3A) of Central Excise Rules, 2002 - Denial of Cenvat credit for default in payment of duty - Effect of stay or admission of appeal on precedential value of High Court judgments - Imposition of penalty consequent to disallowance of Cenvat credit

Validity of Rule 8(3A) of Central Excise Rules, 2002 - Denial of Cenvat credit for default in payment of duty - Effect of stay or admission of appeal on precedential value of High Court judgments - Imposition of penalty consequent to disallowance of Cenvat credit - Whether the demand for differential excise duty in cash by denying utilisation of Cenvat credit under Rule 8(3A) and the penalties imposed thereon are sustainable for the period September, 2009 to August, 2010. - HELD THAT: - The tribunal noted that four different High Courts (Gujarat, Madras, Punjab & Haryana and Bombay) had held Rule 8(3A) to be ultra vires and had struck it down. While the Gujarat High Court judgment was stayed by the Supreme Court and some of the High Court decisions have appeals admitted in the Supreme Court, there was no binding High Court judgment upholding Rule 8(3A). Relying on the decision of the Hon'ble High Court of Bombay in Nashik Forge Pvt Ltd, which applied the ratios of the earlier High Court decisions, the tribunal respectfully followed those High Court rulings. Applying that settled view, the demand premised on Rule 8(3A) was held unsustainable and consequently the penalties predicated on that disallowance were also set aside. The tribunal considered the effect of stays and admissions of appeals but concluded that the cluster of High Court decisions against Rule 8(3A), as applied by the Bombay High Court, justified setting aside the impugned demand and penalties in the present factual matrix. [Paras 14, 15]

The demand for differential duty by denying utilisation of Cenvat credit under Rule 8(3A) and the penalties imposed thereon are unsustainable; the appeals are allowed and the impugned order is set aside.

Final Conclusion: Following a series of High Court decisions holding Rule 8(3A) ultra vires and the Bombay High Court's application of those ratios, the tribunal set aside the demand and penalties relating to denial of Cenvat credit for the period September, 2009 to August, 2010 and allowed the appeals.

Exemption under Notification No. 23/2011-CE (NT) dated 01.12.2011 - Retrospective exemption under Section 11C - Intermediate product versus final product distinction - Application of exemption to goods of Chapter heading 7305

Exemption under Notification No. 23/2011-CE (NT) dated 01.12.2011 - Intermediate product versus final product distinction - Retrospective exemption under Section 11C - Whether MS pipes/tubes manufactured at site for fabrication of pile liners are exempt from central excise duty by virtue of Notification No. 23/2011-CE (NT) dated 01.12.2011 issued under Section 11C. - HELD THAT: - The Tribunal found on the material on record that the assessee manufactured MS pipes/tubes at the 12th cargo berth site of Kandla exclusively for fabrication of pile liners as part of the contract for piling works. On the statutory front, Notification No. 23/2011-CE (NT) dated 01.12.2011, issued under Section 11C with retrospective effect, exempts goods falling under Chapter heading 7305. Given this retrospective exemption, the Tribunal held that MS pipes/tubes used in the fabrication of pile liners fall within the scope of the exemption. The Revenue's contention that exemption arises only from Notification No. 41/2011-CX dated 18.11.2011 was rendered irrelevant by the operation of Notification No. 23/2011-CE (NT) dated 01.12.2011 issued under Section 11C. Applying these legal conclusions to the facts, the Tribunal sustained the adjudicating authority's finding that no duty was payable.

The impugned order dropping the demand is upheld and the Revenue's appeal is dismissed.

Final Conclusion: The Tribunal dismissed the Revenue's appeal, holding that MS pipes/tubes fabricated at site for pile liners are covered by the retrospective exemption under Notification No. 23/2011-CE (NT) dated 01.12.2011 issued under Section 11C, and therefore no excise duty was exigible.

Classification of goods - chapter heading 2715 00 90 v. chapter heading 3208 10 90 - remand for fresh consideration - consideration of laboratory/test reports - principles of natural justice

Classification of goods - chapter heading 2715 00 90 v. chapter heading 3208 10 90 - consideration of laboratory/test reports - remand for fresh consideration - principles of natural justice - The matter is remanded to the Commissioner for fresh examination of the classification of the disputed goods, with directions to consider a specific letter of the Assistant Commissioner and the National Test House examination report and to afford the appellant an opportunity of being heard. - HELD THAT: - The Tribunal found that the impugned Order-in-Original did not deal with the letter dated 07.12.2015 of the Assistant Commissioner which records that the goods are classifiable under chapter heading 3208 10 90 and which refers to the National Test House examination report. In view of this omission, the Tribunal directed that the Commissioner re-examine the classification afresh, specifically deal with the test reports relied upon in the Assistant Commissioner's letter, and afford the appellant adequate opportunity to be heard in accordance with the principles of natural justice. The appellant is directed to cooperate and render necessary assistance without seeking unnecessary adjournments. The Tribunal expressly declined to express any opinion on the correct classification of the goods.

Appeal allowed by way of remand to the Commissioner to re-examine classification after considering the Assistant Commissioner's letter and the National Test House report, and after giving the appellant a fair hearing.

Final Conclusion: The appeal is allowed by way of remand: the Commissioner is directed to re-examine the classification for the period April 2009 to August 2014 in the manner stated, considering the Assistant Commissioner's letter and the National Test House report and affording the appellant an opportunity of being heard; no opinion on classification is expressed by the Tribunal.

Manufacture - definition of "manufacture" under the Tamil Nadu Value Added Tax Act, 2006 - change in commercial identity - process of manufacture - repacking with addition of flavour - identity of product

Manufacture - change in commercial identity - repacking with addition of flavour - Repacking minced tobacco with addition of scent/flavour constitutes manufacture under the definition of "manufacture" in the Tamil Nadu Value Added Tax Act, 2006. - HELD THAT: - The statutory definition requires that a process must bring into existence a commercially different and distinct commodity through altering, treating or otherwise processing. On the facts, the petitioners purchase minced tobacco in bulk, add a flavour/scent and repack into smaller packs. The product retains its original identity and does not become a new commercial commodity. The Court relied on the Supreme Court's decision in Crane Betel Nut Powder Works, which held that addition of flavour did not change the fundamental character of the product and therefore did not amount to manufacture. Applying that principle, the activity of adding scent and repacking minced tobacco does not result in a new or distinct product and is not a manufacturing process under the statutory definition. Consequently, the conclusion recorded by the respondent that the activity was "manufacture" is unsustainable. [Paras 7, 8, 9]

No manufacturing is involved in repacking minced tobacco with added flavour; the impugned orders holding otherwise are set aside and the writ petitions are allowed.

Final Conclusion: Writ petitions allowed: the Court held that adding flavour/scent and repacking minced tobacco does not amount to "manufacture" under the Tamil Nadu VAT Act; the impugned tax orders for the listed periods are quashed and connected petitions closed.

Chain of custody - production before Magistrate - Section 50 of the NDPS Act, 1985 - evidence of official witnesses - independent witnesses - proof beyond reasonable doubt

Chain of custody - production before Magistrate - Whether non-examination of the ASI to whom the case property was handed over disrupted the chain of custody and vitiated the prosecution case. - HELD THAT: - The Court observed that the ASI produced the case property before the Judicial Magistrate and returned it with the seals intact to the handing officer. The Magistrate after verifying the seals passed the order directing custody of the property in police safe custody. The Chemical Examiner's report recorded receipt of the sample with seals intact and matching sample seals. On these facts the Court held that absence of the ASI as a witness did not establish any tampering or break in the chain of custody and therefore did not adversely affect the prosecution case. [Paras 10, 11]

Non-examination of the ASI did not break the chain of custody; the prosecution's link evidence in respect of production before the Magistrate was intact.

Section 50 of the NDPS Act, 1985 - evidence of official witnesses - Whether failure to examine the ASP (who was said to have been summoned and in whose presence search was effected) amounted to violation of Section 50 or otherwise rendered the search and recovery invalid. - HELD THAT: - The Court noted the Trial Court and High Court findings that the ASP was summoned repeatedly but could not be served or was exempted from personal attendance for valid reasons and that adjournments were sought/necessitated in the judicial calendar. The Courts found that the ASP's non-examination, in the factual matrix where he was called to the spot and the search was otherwise conducted and recorded, did not amount to fatal non-compliance with statutory safeguards. The Court therefore concluded that mere non-examination of the ASP did not vitiate the prosecution case under the Act. [Paras 13]

Non-examination of the ASP did not constitute fatal violation of Section 50; prosecution compliance was sufficient on the facts.

Independent witnesses - evidence of official witnesses - proof beyond reasonable doubt - Whether absence of independent witnesses, though allegedly available, compelled acquittal when the prosecution examined only official witnesses. - HELD THAT: - The Court accepted the prosecution evidence that efforts were made to secure independent witnesses but none were available. Relying on precedent that evidence of official witnesses is not to be distrusted merely because of their official status, the Court held that absence of independent witnesses does not automatically indicate false implication. Applying these principles to the material on record, the Court found that the prosecution proved guilt beyond reasonable doubt. [Paras 14, 15, 16]

Conviction could stand despite non-examination of independent witnesses; evidence of official witnesses was sufficient to prove guilt beyond reasonable doubt on the facts.

Final Conclusion: The convictions and sentence under Section 18 of the NDPS Act were upheld: non-examination of the ASI and ASP and absence of independent witnesses did not vitiate the prosecution case on the facts, and the appellant's conviction was maintained; bail bonds cancelled and appellant directed to surrender within four weeks.

Territorial jurisdiction in cheque-dishonour prosecutions under Section 138 read with Section 177 CrPC - requirement to re-file complaints returned for want of territorial jurisdiction within thirty days as directed in Dashrath Rupsingh Rathod - effect of Negotiable Instruments (Amendment) Ordinance, 2015 and insertion of Section 142A on pending complaints - limitation consequences of failure to re-file returned complaints - effect of revival order by the Supreme Court on complainant's obligation to re-file

Territorial jurisdiction in cheque-dishonour prosecutions under Section 138 read with Section 177 CrPC - Whether the learned Metropolitan Magistrate, Patiala House Courts had territorial jurisdiction to entertain the complaint as originally filed. - HELD THAT: - The Court held that the place where the cheque is dishonoured (the branch of the drawee bank) determines the territorial jurisdiction for prosecution under Section 138 read with Section 177 CrPC. Since the cheques were drawn on a branch located in Defence Colony, New Delhi, the complaint originally filed before the M.M., Patiala House Courts was not maintainable. The Supreme Court's decision in Dashrath Rupsingh Rathod constrains the venue of trial to the court within whose local jurisdiction the drawee bank is situated, and the trial court in this case lacked such territorial jurisdiction when the complaint was instituted. [Paras 15, 16, 17]

The complaint as originally filed before the learned M.M., Patiala House Courts was not maintainable for want of territorial jurisdiction.

Requirement to re-file complaints returned for want of territorial jurisdiction within thirty days as directed in Dashrath Rupsingh Rathod - limitation consequences of failure to re-file returned complaints - Whether the appellant complied with the Supreme Court direction to re-file the returned complaint within thirty days and the legal consequence of non-compliance. - HELD THAT: - The Supreme Court in Dashrath Rupsingh Rathod directed that complaints (not having reached Section 145(2) stage) returned for filing in the proper court must be re-filed within thirty days and, if re-filed within thirty days, would be deemed filed within time. The trial court returned the complaint on 25th August, 2014 and the appellant did not re-file within thirty days. The appellant's conduct of awaiting further orders in its appeal before the Supreme Court did not excuse the delay, particularly as the trial was earlier revived by the appellant and the trial court had been directed to proceed subject to not delivering final judgment without leave. Physical collection date of the file did not extend the statutory or directed period for re-filing. Consequently, re-filing on 4th November, 2015 was beyond the permitted period and the complaint was time-barred. [Paras 20, 21, 22, 23, 24]

The appellant failed to re-file the returned complaint within thirty days as required and the delay rendered the re-filed complaint barred by limitation.

Effect of Negotiable Instruments (Amendment) Ordinance, 2015 and insertion of Section 142A on pending complaints - Whether the Negotiable Instruments (Amendment) Ordinance, 2015 (and insertion of Section 142A) entitled the appellant to have its returned complaint treated as pending or transferred to a competent court notwithstanding non re-filing within thirty days. - HELD THAT: - Section 142A as inserted by the Ordinance/Act contemplates deemed transfer of cases that were pending as on its commencement to the court having jurisdiction under the newly provisioned rule. However, the Ordinance benefits only those complaints that were pending in a court on the commencement date. The appellant's complaint had been returned and was not pending before the Patiala House Court or the Saket Court as on 15th June, 2015, the date the Ordinance came into force. Further, the appellant itself sought and accepted physical return of the complaint after the Ordinance came into effect, undermining any contention that the complaint remained pending for the purpose of automatic transfer. Therefore the Ordinance did not operate to save or revive the appellant's re-filed complaint. [Paras 26, 27, 28, 29, 30]

The Negotiable Instruments (Amendment) Ordinance, 2015 / Section 142A did not help the appellant because the complaint was not pending in any court on the Ordinance's commencement and the appellant had accepted return of the file.

Effect of revival order by the Supreme Court on complainant's obligation to re-file - Whether the appellant's awaiting of the Supreme Court's final decision on its appeal excused non-compliance with the thirty-day period for re-filing the returned complaint. - HELD THAT: - The Court noted that the appellant had earlier procured revival of proceedings by the order dated 17th October, 2012 and had applied to revive the complaint; the trial court had accordingly revived proceedings. Given that the appellant had sought and obtained revival and had proceeded in the revived proceedings, it could not later contend that it was awaiting further orders from the Supreme Court so as to justify not re-filing the complaint within thirty days. The revival and the appellant's conduct obliged it to comply with the directions requiring prompt re-filing unless the proceedings were stayed, which was not the case. [Paras 22, 23]

Awaiting the Supreme Court's final decision did not excuse the appellant's failure to re-file the returned complaint within the prescribed period.

Final Conclusion: The High Court dismissed the petition; the complaint originally filed before an improper forum was not maintainable, the appellant failed to re-file the returned complaint within the thirty-day period directed by the Supreme Court and the Negotiable Instruments (Amendment) Ordinance, 2015 did not avail the appellant as the complaint was not pending on the Ordinance's commencement and had been returned and accepted by the appellant.

Exemption from attachment of one main residential house under Section 60(1)(ccc) CPC as applicable to Delhi - reading an incorporated provision in the context of the parent enactment (legislation by incorporation) - operation of Rule 2, Rule 16 and Rule 51 of the Second Schedule to the Income Tax Act in recovery proceedings - effect of restraint orders and relation back of attachment in certificate proceedings - limits of protection afforded to purchasers against prior attachment in tax/recovery certificate proceedings

Exemption from attachment of one main residential house under Section 60(1)(ccc) CPC as applicable to Delhi - reading an incorporated provision in the context of the parent enactment (legislation by incorporation) - Whether the expression "judgment debtor" in Section 60(1)(ccc) CPC, as applicable to Delhi, must be read as a general protection available to any judgment debtor in recovery proceedings or must be read in the context of the PRI Act definitions. - HELD THAT: - The Court held that Clause (ccc) was introduced into the CPC by amendments under the Punjab Relief of Indebtedness Act (PRI Act) and was extended to Delhi; when a provision is incorporated by reference it must be read in the sense it bore in the original enactment. Clause (ccc) therefore must be interpreted in the context and for the class of persons (and kinds of "debt") contemplated by the PRI Act, not as a blanket exemption for every judgment debtor in all recovery proceedings. Reading Clause (ccc) divorced from the PRI Act's objects and its defined terms would produce absurd results and enable avoidance of adjudicated liabilities. The legislative history, object of the PRI Act and established principles of incorporation and statutory interpretation support this contextual reading. [Paras 82, 83, 86, 94]

Clause (ccc) of the proviso to Section 60(1) CPC, as applicable to Delhi, must be construed in the context of the PRI Act and its definitions; it does not confer blanket protection on every judgment debtor in recovery proceedings.

Operation of Rule 2, Rule 16 and Rule 51 of the Second Schedule to the Income Tax Act in recovery proceedings - effect of restraint orders and relation back of attachment in certificate proceedings - limits of protection afforded to purchasers against prior attachment in tax/recovery certificate proceedings - Whether the petitioner, who acquired the property by sale deed in 2006, could claim immunity from attachment/sale in execution under Rule 10 read with Section 60(1)(ccc) CPC given that demand notice was served in March 2002 and restraint/attachment operated by relation back. - HELD THAT: - The Court accepted the factual findings of the Recovery Officer, DRT and DRAT that demand notice under Rule 2 was served in March 2002, a restraint order was recorded (24.08.2004) and the attachment relates back to the date of service by virtue of Rule 51. Consequently the transfer in 2006 was executed in breach of Rule 16 and the express restraint order; it was not a sale in pursuance of an agreement registered prior to attachment and therefore not saved by Section 64(2) CPC. The DRAT rightly found that the petitioner was not in possession in her own right on the crucial date of service and could not claim lifting of attachment under Rule 11. The Court found no reason to interfere with the concurrent conclusions that the sale did not confer a better title than the certificate debtor's and that Clause (ccc) did not avail the petitioner on these facts. [Paras 23, 25, 31, 32, 101]

The transfer to the petitioner is ineffective to defeat the recovery: the attachment related back to service in March 2002; the 2006 sale was in breach of Rule 16/read with Rule 51 and the restraint order; the petitioner is not entitled to protection under Rule 10/Section 60(1)(ccc) on these facts.

Limits of protection afforded to purchasers against prior attachment in tax/recovery certificate proceedings - Whether the petitioner's plea of bona fide purchaser without notice and the contention that the sale was to redeem an earlier mortgage could save the transfer from attack in the recovery proceedings. - HELD THAT: - The tribunals' findings that the demand notice had been served earlier and that the property was in possession and disclosed by the certificate debtor on record precluded the petitioner from being treated as a purchaser entitled to protection. The DRAT found the alleged redemption and the subsequent private sale did not validate the transfer vis a vis the earlier served demand and restraint; the Recovery Officer, DRT and DRAT rejected the petitioner's bona fides on the material. The High Court observed that if the petitioner alleged fraud by the transferor she may have remedies against his estate, but that does not defeat the certificate holder's right of recovery. [Paras 23, 25, 30, 32]

The petitioner's plea of bona fide purchase and redemption of mortgage does not protect the 2006 transfer against the Recovery Officer's attachment and consequent recovery proceedings.

Reading an incorporated provision in the context of the parent enactment (legislation by incorporation) - Whether decisions holding Clause (ccc) to be available in Delhi (e.g., S.C. Jain) bind the Court on the present question of the scope of Clause (ccc). - HELD THAT: - The Court held that earlier Division Bench decisions upheld the availability of Clause (ccc) in Delhi but did not decide the narrower question of the scope of Clause (ccc) vis a vis whom it protects. S.C. Jain decided non repeal of Clause (ccc) for Delhi but did not examine whether the term 'judgment debtor' in Clause (ccc) encompasses all judgment debtors irrespective of the PRI Act's object and definitions. Therefore those precedents did not preclude a contextual interpretation of Clause (ccc) in line with the PRI Act. [Paras 63, 73]

Prior authorities establishing the continued availability of Clause (ccc) in Delhi do not preclude reading Clause (ccc) in the context of the PRI Act; the question of scope remained open and has been decided in this judgment.

Final Conclusion: The writ petition is dismissed. The High Court upholds the findings of the Recovery Officer, DRT and DRAT that the demand notice served in March 2002 and resultant restraint/attachment (relating back under Rule 51) defeated the 2006 private transfer; Clause (ccc) of the proviso to Section 60(1) CPC must be read in the context of the PRI Act and does not afford the petitioner protection on the facts; the impugned DRAT order is affirmed.